SENSEX NIFTY
Aug 08, 2013, 08.19 PM IST | Source: PTI

FinMin to give Rs 8,000 cr cash subsidy to OMCs in Q1

Finance Ministry today agreed to give Rs 8,000 crore cash subsidy to fuel retailers IOC, BPCL and HPCL to make up for less than a third of losses they incur on selling diesel and cooking fuel below cost.

Finance Ministry today agreed to give Rs 8,000 crore cash subsidy to fuel retailers IOC , BPCL and HPCL to make up for less  than a third of losses they incur on selling diesel and cooking fuel below cost.

Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) lost Rs 25,579 crore on selling diesel, domestic LPG and kerosene below cost in the April-June quarter.

Of this, the finance ministry issued a letter sanctioning Rs 8,000 crore, officials said. The subsidy support sanctioned is way short of Rs 11,451 crore that the Oil Ministry has sought for the first quarter of the fiscal. Upstream oil firms like Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and GAIL India Ltd will bear Rs 15,303.84 crore and the rest would be borne by fuel retailers.

Officials said IOC will get cash subsidy of Rs 4,261.29 crore, BPCL Rs 1,916.57 crore and HPCL Rs 1,822.14 crore for the April-June quarter. Government bears a third of the revenue losses or under recoveries that retailers incur on selling fuel at government controlled rates. Upstream firms chip in a substantial portion by way of discount on crude oil and LPG they sell to retailers.

Depreciating rupee has resulted in widening losses on fuel sales and oil firms are currently losing Rs 9.29 per litre on diesel, Rs 33.54 a litre on kerosene and Rs 412 per 14.2-kg LPG cylinder. ONGC, they said, will chip in Rs 12,621.78 crore, OIL Rs 1,982.06 crore and GAIL Rs 700 crore to make up for bulk of fuel losses in the April-June period.

From upstream share, IOC would get Rs 8,151.77 crore, BPCL Rs 3,666.36 crore and HPCL Rs 3,485.71 crore. Without the cash subsidy, fuel retailers were set to report losses in Q1. HPCL announce first quarter numbers on August 12 while IOC and BPCL are schedule to declare results the next day. 

IOC stock price

On August 20, 2014, Indian Oil Corporation closed at Rs 355.30, down Rs 2.9, or 0.81 percent. The 52-week high of the share was Rs 385.35 and the 52-week low was Rs 194.50.


The company's trailing 12-month (TTM) EPS was at Rs 52.04 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 6.83. The latest book value of the company is Rs 271.80 per share. At current value, the price-to-book value of the company is 1.31.

READ MORE ON  oil subsidy.OMC, IOC, BPCL, HPCL
Set email alert for
IOC BPCL HPCL

ADS BY GOOGLE

video of the day

Neutral on India as good news discounted; like Voltas: HSBC

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.