Government may revert to tripartite fuel subsidy sharing
19 Jan 2010
Even as a decision is yet to be taken on the subsidy sharing mechanism for government-owned oil companies, oil secretary R S Pandey told reporters on Tuesday the government will prepare a scheme before the fiscal year ends.
He added upstream oil companies like ONGC may need to share the burden with fuel retailers like Indian Oil, HPCL and BPCL, the downstream companies.
The Indian government compensates for losses that state-run oil marketing companies (OMCs) run into by selling auto (petrol, diesel) and cooking (LPG) fuels at below cost price.
An analysis by CNBC-TV18's Gautam Broker shows the government may revert to the tri-partite 33-per cent subsidy sharing formula that was practised earlier, in which the government, upstream and downstream oil companies share losses.
The government has already disbursed about Rs12,000 crore and may shell out an additional Rs2,000 crore.
The upstream companies have already borne about Rs4,000 crore in the first half. They may have to bear another Rs10,000 crore in the second half.