Government will go for its stake sale in ONGC after finalising a new subsidy sharing formula as it would help in fetching better price in the market.
"Government is looking at new subsidy sharing formula. As far as ONGC is concerned, they have some issues regarding subsidy sharing formula. Let's have relook on the issue. I am sure ONGC will get better price," Oil Minister Dharmendra Pradhan said. However, the Department of Disinvestment will take a call on time of divestment of ONGC, he told reporters after meeting with Finance Minister Arun Jaitley.
During the meeting, also attended by senior officials, discussions focused on selling of government stakes in oil companies other than ONGC, a source said. "Well I am not ruling out ONGC but today's meeting was on other oil companies. I can tell you all options are open and I am watching the market and getting enough stocks in place, when the market is good I will do," the source added.
The Cabinet has approved 5 per cent stake sale in ONGC, which could fetch an estimated Rs 11,500 crore to the exchequer. Government holds 68.94 percent in ONGC. Source said the Oil Ministry is reworking the fuel subsidy sharing formula to cut ONGC payout by a quarter through adjustment of statutory oil cess against its share.
The move to lessen the subsidy burden is expected to give a fillip to government's plan to sell 5 per cent stake in Oil and Natural Gas Corp (ONGC). Upstream producers like ONGC met nearly half of the revenue loss or under-recoveries that fuel retailers incurred on selling cooking fuel and diesel until recently at government controlled rates.
In 2013-14, ONGC paid a record Rs 56,384 crore subsidy, which this fiscal is likely to come down to around Rs 32,000 crore.
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