Dividend cut from oil firms unlikely; government to meet disinvestment target, says Economic Affairs Secretary

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Updated: October 9, 2018 5:14:56 PM

Even as OMCs have been asked to absorb Rs 1 per litre, the government doesn’t expect a dividend cut from their side, Economic Affairs Secretary Subhash Chandra Garg said in a tweet.

BRICS, credit rating, India, Subhash Chandra GargThe government has set an ambitious disinvestment target of Rs 80,000 crore for FY19. (IE)

Even as oil marketing companies (OMCs) have been asked to absorb Rs 1 per litre, the government doesn’t expect a dividend cut from their side, Economic Affairs Secretary Subhash Chandra Garg said in a tweet. In addition, there is no plan to cut down subsidy, he added.  “A news agency has published an item attributed to unnamed Finance Ministry official about dividend getting reduced from oil marketing companies, subsidies cut, lesser disinvestment revenue etc. This is completely fabricated. Nothing of this is true at all,” Chandra Garg tweeted on Tuesday.

Just after the government on Thursday announced a Rs 2.50 per litre cut in petrol and diesel prices as it cut excise duty by Rs 1.50 a litre and asked oil marketing companies (OMCs) to absorb a Rs 1 cut.

“Government’s move will bring down the EPS by 23 per cent-46 per cent. It also raised fears of return of subsidy regime if crude spikes further in upcoming elections. ONGC and Gail may also be impacted but these already build-in risk,” CLSA had said in a note.

Meanwhile, the government has set an ambitious disinvestment target of Rs 80,000 crore for FY19.

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