| In a move that could help Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd end 2005-06 in the black, the petroleum ministry has proposed to change the subsidy sharing mechanism, which will result in the two companies benefiting to the tune of Rs 802 crore. |
| The petroleum ministry has increased the subsidy sharing burden on upstream companies "" ONGC, Oil India Ltd and GAIL (India) Ltd ""to Rs 14,000 crore for 2005-06 from Rs 13,198.16 crore earlier. The additional Rs 802 crore recovered from these companies will be given exclusively to HPCL and BPCL. |
| The oil marketing companies, HPCL, BPCL and Indian Oil Corporation, have been losing heavily for over an year on account of rising crude oil prices in the world markets and stagnant retail prices of petrol, diesel, kerosene and LPG in the country. |
| The ministry has now decided to provide compensation in two stages. In the first, oil bonds of Rs 11,500 crore and Rs 13,198 crore from the upstream companies will be shared by the three public sector oil marketing companies in proportion to their under-recoveries. In the second, the additional Rs 802 crore will be shared between HPCL and BPCL. |
| Petroleum ministry officials were of the view that even after the bond issue, HPCL and BPCL could still report a loss or record just marginal profits for 2005-06. Sources in the ministry added that a look at the balance sheet revealed the need for additional support to ensure profitability. Hence, the additional assistance of Rs 802 crore was being provided to the two companies. |
| As a result of the new formula, approved by Petroleum Minister Murli Deora, Hindustan Petroleum and Bharat Petroleum will now get Rs 5,962 crore as the total assistance for 2005-06. IndianOil, on the other hand, will get Rs 8038 crore. |
| In October 2005, the petroleum ministry had proposed an upstream assistance of Rs 14,000 crore along with the Rs 11,500 crore bonds as a package for the oil marketing companies. |
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