In 2011-12 fiscal, public sector oil companies will get Rs 38,500 crore additional cash subsidy from the Union government as compensation for selling diesel, domestic LPG and kerosene below cost, a top Oil Ministry official said in Delhi.
The Finance Ministry has agreed to give the amount for the January-March quarter,the official added. The cash payout would be on top of Rs 45,000 crore that Indian Oil Corp (IOC), Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL) got for the first nine months of 2011-12 financial year.
The three firms had lost a record Rs 1,38,541 crore on selling diesel, domestic LPG and kerosene at government- controlled rates that were way lower than market price. Together with the additional payout agreed, the government will make up 60 per cent or Rs 83,500 crore of the total revenue loss.