ONGC to provide Rs 800 cr subsidy

Oil and Natural Gas Corporation is expected to provide for Rs 800 crore as its share of kerosene and cooking gas subsidy for April-June 2004 when it finalises its accounts for the first quarter on Wednesday.

The company's chairman and managing director, Subir Raha, told reporters on the sidelines of a Ficci seminar that the government had asked ONGC, Gail (India) Ltd and Oil India Ltd to take one-third of the subsidy amounting to around Rs 1,400 crore during the first quarter of the financial year.

While the oil marketing companies would take a one-third hit, the rest will be accounted for in the Centre's Budget. The oil marketing companies reported under-recoveries of Rs 5,100 crore from the sale of kerosene, cooking gas, diesel and petrol during the first quarter.

Of this, under-recoveries from the two cooking fuels was estimated at over Rs 3,600 crore. ONGC had last year taken a Rs 2,600 crore hit since it was made to share the subsidy burden.

The company had earlier sought a refund of last year's subsidy burden since it attributed it as the cause for lower profits, the subsidy bill on the cooking fuels is expected to increase during the course of the current financial year due to an increase in international prices. Oil companies have not been permitted by the government increase prices since April 1, 2002.

Raha also said that the company is awaiting government approval for a swap deal with Cairn Energy's two blocks in the Krishna-Godavari basin and the Gulf of Cambay and ONGC's two on-shore blocks in the Ganga valley.

"The proposal was submitted during the National Democratic Alliance's tenure but approval has been delayed due to the general elections. we are awaiting a decision on the issue," Raha said.