No exemption to ONGC from fuel subsidy payout: Pradhan

The government is not considering exempting state-owned Oil and Natural Gas Corp (ONGC) from payment of fuel subsidy, Oil Minister Dharmendra Pradhan said today.
Fuel retailers sell domestic cooking gas (LPG), kerosene and until recently diesel at government controlled rates which are way below cost to control inflation. The losses they thus incurred were met through a combination of cash subsidy from Union Budget and dole out from oil and gas producers like ONGC.
With government deregulating diesel, the most consumed fuel in India, and international oil rates slumping to five year low leading to almost halving of the losses, there is a demand for exempting ONGC from subsidy payouts.

When asked if the government plans to exempt ONGC from fuel subsidy sharing mechanism, Pradhan said, "No. There is no such proposal."
Pradhan was replying to questions put by reporters on the sidelines of an industry event here.
Last fiscal, when retailers lost Rs 139,869 crore on fuel sales, ONGC chipped in Rs 56,384.29 crore. In the first half of current fiscal, it paid Rs 26,841 crore.

The revenue loss or under-recovery on fuel sales this fiscal is estimated around Rs 79,000 crore, of which over Rs 51,000 crore has already been accounted for in the first six months.
In Rajya Sabha, Pradhan said the government was considering reworking the subsidy sharing formula for ONGC.

"The matter is under consideration of the Government," he said in a written reply to a question without giving details.
Any move to lessen the subsidy burden of ONGC will help the government realise a better price for its planned 5 per cent share sale this fiscal.
ONGC shares ended 3 per cent higher at Rs 371.45 on stock exchanges.