Hit by under-recoveries, oil marketing companies (OMCs) may get a boost after the finance ministry on Tuesday hinted at cash compensation to offset revenue losses incurred on sale of subsidised fuel.
Finance secretary Ashok Chawla said that the government would not issue oil bonds to government-owned oil companies. However, he said, the government is likely to compensate them for losses suffered on sale of fuel at lower than market price by paying them cash.
Chawla said no decision has been taken on the compensation amount. “It is under consideration. The decision will be taken at the highest level,” he said on the sidelines of a SIDBI conference, adding that oil-marketing companies would receive cash before March 31.
At present, fuel retailers are incurring gross revenue loss of Rs 3.49 per litre of petrol, Rs 2.38 on diesel, Rs 18.13 on kerosene and Rs 250.67 on every 14.2 kg cylinder of cooking gas. At the present crude oil price level, PSU fuel retailers are projected to incur revenue losses to the tune of Rs 45,478 crore in the full financial year.
Chawla’s statement co mes on heels of petroleum minister Murli Deora meeting prime minister Manmohan Singh to seek over Rs 20,000 crore worth oil bonds to oil companies.
Source: http://www.mydigitalfc.com
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