Rising crude oil prices: Subsidy issues come to haunt ONGC again

ONGC's investors saw their holding values lag the broader markets during 2014-2016 as global crude oil prices fell.

Oil and Natural Gas Corporation (ONGC), the country’s key public sector producer in the segment, is in the spotlight due to rising crude oil prices. While producers would earn more for every barrel of oil sold, with costs largely unchanged, the risk of a rising subsidy burden imposed by the government to cushion the impact of rising prices on end-consumers is proving a key worry. 

Recent news reports that the company might have to forgo its revenue from crude prices in excess of $70 a barrel was bound to impact Street sentiment. Though a subsidy sharing mechanism is not currently in