In what may come as an empty Diwali bonus for the bleeding oil marketing companies, the government has sent an assurance letter of compensation of Rs 30,000 crore to IOC, HPCL and BPCL.
This is roughly half of the total amount needed from the government to compensate oil marketing companies for selling diesel, kerosene and cooking gas cylinders below the market price during April-September period.
The assurance letter from the finance ministry has come just a day before the OMCs are to declare their second quarter results.
This would allow firms to adjust the subsidy amount in their books to lower the loss on account of under recoveries.
According to sources, the finance ministry is unlikely to release the actual money before January till the supplementary grant is provided.
Out of total Rs 30,000 crore, the share of Indian Oil Corporation stands at R16,094 crore, HPCL R6,600 crore and BPCL, R7,400 crore. The oil ministry has sought compensation to the tune of R1 lakh crore for the entire year.
?About R60,000 crore of under-recoveries during the current year are likely to be borne by the upstream companies (ONGC, OIL and GAIL), efforts will be made to persuade the ministry of finance to compensate the balance under-recoveries,? Moily said earlier.
