ONGC, OIL, Gail to continue discounts
10 Oct 2012
Petroleum secretary G C Chaturvedi told the Economic Editors' Conference in Delhi today that the government has asked the upstream oil exploration and production companies Oil & Natural Gas Corp (ONGC) and Oil India Ltd (OIL) to continue giving a discount of $56 per barrel of crude oil they sell to refiners.
"Upstream discount this year will be same as previous year," Chaturvedi said, adding that this would help the refiners and retailers, namely Indian Oil, Bharat Petroleum and Hindustan Petroleum to cut their losses.
ONGC, OIL and Gail Ltd have together contributed Rs14,000 crore in the the first quarter of this financial year and would pay a similar amount in the second quarter also, Chaturvedi said. State-run upstream companies share the fuel subsidy burden by giving discounts on crude oil to refiners, while gas distributor offers discount in the supply of cooking gas.
Fuel retailers, who have incurred revenue losses of Rs 90,000 crore in the six month ended September, are waiting for cash compensation from the finance ministry, which is ascertaining the veracity of numbers.
"We subject each other with scrutiny, this is welcomed ... we have made all data available to the finance ministry and they are working out the actual under-recovery (revenue losses)," Chaturvedi said.
On two occasions in the past, the finance ministry had examined the revenue loss figures and did not find much difference from the oil ministry's figures, he added.
The ministry has also ruled out any increase in the price of natural gas from the Krishna-Godavari D6 block run by Reliance Industries Ltd.
Chaturvedi said that output from D6 block had dropped 9 per cent since last year to 26 mmscmd, and unless the operator (RIL) developed new fields, the block would eventually stop producing gas. Exploration firms are demanding a higher price to justify investment in new projects.