The huge subsidy burden on petroleum products that the Oil and Natural Gas Corporation (ONGC) is bearing on behalf of the government is now almost becoming ‘back-breaking’, the oil major’s chairman and MD, Sudhir Vasudeva, has said.
"Subsidy burden is now almost becoming backbreaking. They are saying that this year's burden (combined) will be around Rs 1,40,000 crore," Vasudeva told reporters on Thursday.
"Ultimately, what is important is how much the government is looking to take the burden. If the government passes everything to us, then what happens?" he asked.
He said the state-run company’s fuel subsidy in the first half of this fiscal was Rs 23,400 crore.
Vasudeva was speaking to the mediapersons on the sidelines of an event organized by the Institute of Chartered Accountants (ICAI). Shouldering the burden of hefty domestic subsidies, ONGC, India's largest oil and gas exploration company, has reported a modest profit growth in the second quarter this fiscal.
Earlier, pulled down by heavy subsidy burden, the company posted a 34% drop in net profit during the first quarter, raising concerns about its ability to finance a major investment programme.
On the probable subsidy burden for this fiscal, Vasudeva also said the under recoveries could be about Rs 140,000 crore on the back of a weak rupee coupled with soaring crude oil prices.