Oil cos ask govt for additional Rs 120 bn subsidy for LPG, kerosene: Report

Oil marketing companies (OMCs) have asked the Indian government for an additional Rs 120 billion subsidy payment for liquefied petroleum gas (LPG) and kerosene, according to a CNBC report quoting government sources. 

 

Amid weakening rupee and high crude oil price, India's OMCs have been under immense pressure. According to reports, the Finance Ministry will access oil companies' need for additional subsidy.

According to a report by Business Standard, government support for LPG and kerosene, constituting the petroleum subsidy, is set to increase by 66 per cent over the budgetary estimate for 2018-19. Based on the current prices of LPG and kerosene, the subsidy on these products may touch Rs 414.78 billion, against the targeted Rs 249.32 billion. According to the latest estimates by the government, the LPG subsidy is set to increase 73 per cent to Rs 352.57 billion, against the budgeted Rs 203.77 billion for 2018-19. The subsidy for kerosene will increase 36 per cent, from Rs 45.55 billion to Rs 62.21 billion, during the financial year.

On kerosene, the subsidy comes to Rs 16.16 per litre. On LPG, it amounts to Rs 320.49 per cylinder, based on the data with the Petroleum Planning & Analysis Cell.