India to pay state fuel retailers $5.5 billion oil subsidy

NEW DELHI Thu Nov 8, 2012 11:50pm IST

A vendor loads empty Liquefied Petroleum Gas (LPG) cylinders onto a truck in Mathura January 29, 2009. REUTERS/K.K. Arora/Files

A vendor loads empty Liquefied Petroleum Gas (LPG) cylinders onto a truck in Mathura January 29, 2009.

Credit: Reuters/K.K. Arora/Files

Related Topics

Stocks

   

NEW DELHI (Reuters) - India will pay 300 billion rupees ($5.5 billion) to state-owned fuel retailers forced to sell at cheaper government-set rates in the first half of the year, said three sources who saw the finance ministry's confirmation letter.

The government fixes retail prices of liquefied petroleum gas, kerosene and diesel to protect the poor, leading to revenue losses at state-run Indian Oil Corp (IOC) (IOC.NS), Bharat Petroleum Corp (BPCL) (BPCL.NS) and Hindustan Petroleum Corp (HPCL) (HPCL.NS).

The payout by the finance ministry, nearly 46 percent less than the 554 billion rupees the oil ministry had been seeking, will be released after parliamentary approval is granted, the sources said.

The finance ministry pays cash subsidies to state oil retailers while state-run upstream companies - Oil and Natural Gas Corp (ONGC.NS), Oil India Ltd (OILI.NS) and GAIL (India) (GAIL.NS) - sell crude oil and associated products at a discount.

India raised the price of diesel in mid-September, after a gap of more than a year, and capped annual sales of subsidised cooking gas cylinders to six per household.

The three fuel retailers received the letter from the finance ministry on Thursday morning, the sources said.

IOC, the largest fuel retailer, will receive a government subsidy of about 161 billion rupees, while HPCL and BPCL's share will be about 66.7 billion rupees and 72 billion rupees respectively, they said. (Reporting by Nidhi Verma; Editing by David Goodman)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage