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State-owned fuel retailers are likely to get Rs 8,000 crore cash subsidy on September 17 to make up for less than a third of losses they incurred on selling diesel and cooking fuel below cost in first quarter.
"We have been told that the first quarter compensation will come on September 17," Indian Oil Corp (IOC) Director (Finance) P K Goyal told reporters here.
IOC, Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) lost Rs 25,579 crore on selling diesel, domestic LPG and kerosene below cost in the April-June quarter.
"The government has issued a letter sanctioning Rs 8,000 crore for Q1. Of this, our share will be over Rs 4,261 crore," he said.
The subsidy support sanctioned is way short of Rs 11,451 crore that the Oil Ministry has sought for the first quarter of the fiscal.
Upstream oil firms like Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and GAIL India Ltd will bear Rs 15,303.84 crore and the rest would be borne by fuel retailers.
Officials said IOC will get cash subsidy of Rs 4,261.29 crore, BPCL Rs 1,916.57 crore and HPCL Rs 1,822.14 crore for the April-June quarter.
Government bears a part of the revenue losses or under recoveries that retailers incur on selling fuel at government controlled rates. Upstream firms chip in a substantial portion by way of discount on crude oil and LPG they sell to retailers.
Goyal said 12 per cent depreciation in rupee value against the US dollar has widened losses on fuel sales and oil firms are currently losing Rs 10.22 per litre on diesel, Rs 33.54 a litre on kerosene and Rs 412 per 14.2-kg LPG cylinder.
At current prices, the three retailers will end the fiscal with a total under-recovery of Rs 140,000 crore, he said.
To make up for a part of the Rs 25,579 crore revenue loss on Q1, ONGC will chip in Rs 12,621.78 crore, OIL Rs 1,982.06 crore and GAIL Rs 700 crore.
From upstream share, IOC got Rs 8,151.77 crore, BPCL Rs 3,666.36 crore and HPCL Rs 3,485.71 crore.
Goyal said the company is at present not considering approaching shareholders for raising the borrowing limit. "Our borrowing limit is Rs 110,000 crore and our current borrowing is about Rs 75,000 crore. So, we have some headroom."
