The country’s oil and gas producers have been forced to bear a higher-than-expected subsidy burden for selling fuel to the oil marketers in the fiscal second quarter, as the government has issued less oil bonds than earlier projections. The additional provision of nearly Rs 4,000 crore was despite the under-realisation of the marketers being lower than in the quarter ended June 2008.
“The oil bonds during the quarter were lower. But all in all, there is no real mechanism on how the fuel subsidy burden is shared,” said an official in the oil ministry. Gail India, the country’s largest gas transporter and marketer, had accounted for Rs 400.83 crore as discount on the cooking gas they sell to the oil marketing companies. The government has now asked Gail to pay 64.4 per cent higher, or Rs 659 crore, as its subsidy payout in September quarter this year.
Gail declared its second quarter results on October 23. The government finalised the subsidy burden of the oil and gas producers at the end of the month. “We will have to account for the additional burden in our third quarter,” said a Gail official. Gail’s second-quarter profit rose 79 per cent to Rs 1,023 crore, compared with the year-ago quarter. ONGC, the country’s largest oil producer, paid a final subsidy of Rs 12,600 crore during the quarter compared with the earlier projected around Rs 9,200 crore.
