Govt dips into ONGC again to bail out PSUs
The petroleum ministry seems set to tap ONGC, the most profitable PSU in the country, to contribute an additional Rs 3,000 crore to help prevent state-owned oil marketing companies — Indian Oil Corp, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd— from going into red, Anupama Airy reports.business Updated: May 13, 2009 22:01 IST
The petroleum ministry seems set to tap ONGC, the most profitable PSU in the country, to contribute an additional Rs 3,000 crore to help prevent state-owned oil marketing companies (OMCs) — Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) — from going into red. All three OMCs are yet to announce their annual numbers for 2008-09.
The move to seek another Rs 3,000 crore from ONGC goes against a decision taken by the cabinet in December 2008 that contributions by ONGC, Oil India Ltd (OIL) and GAIL towards under-recoveries of OMCs for 2008-09 will be restricted to Rs 32,000 crore.
ONGC top brass was tightlipped about the issue and refused to comment. However, a senior company official confirmed that the ministry was seeking additional funds from ONGC.
“We have not got anything in writing but have been verbally told to be prepared for contributing close to Rs 3,000 crore on account of the interest losses by OMCs due to the delays in issuance of oil bonds by the government,” the official said. “Oil India Ltd and GAIl may also be asked to pitch in.”
ONGC has already contributed over Rs 27,000 crore towards under-recoveries of the OMCs on sales of petrol, diesel, LPG (cooking gas) and kerosene in the domestic market below the cost price.
“Funds are being sought to prevent HPCL from posting losses,” a senior ministry official said. “IOC and BPCL are also seeking compensation for losses due to interest losses on delays in issuance of oil bonds.”
The bottom lines of all three companies have been in the red for the nine months ending December 31 on account of selling petrol, diesel, kerosene oil and LPG below the cost price.
IOC, the largest of the three OMCs, suffered a net loss of Rs 3,673 crore in the period, HPCL Rs 4,529 crore and BPCL Rs 2,892 crore.
The under-recoveries of the three OMCs for 2008-09 have been worked out at Rs 1,03,292 crore. While ONGC, OIL and GAIL have already contributed Rs 32,000 crore, the government has issued Rs 60,983 crore by way of oil bonds. Another Rs 10,306 crore oil bonds are likely to issued shortly.