Subsidy burden to touch Rs 1,80,000 crore: ONGC chairman

Sun, May 11 10:09 PM

Kuthalam (TN), May 11 (PTI) With the recent upsurge in global crude oil prices, the subsidy burden to the public sector oil companies is expected to touch an all time high of Rs 1,80,000 crore this fiscal, ONGC Chairman R S Sharma today said. Talking to reporters here on the sidelines of a function, Sharma said during 2006-07, subsidy burden to the oil companies was about Rs 54,000 crore, which in the next fiscal shot up to Rs 76,000 crore and in the current fiscal the under recovery will touch Rs 1,80,000 crore.

"As far as ONGC is concerned we get international parity price and from quarter to quarter we get subsidy portion from the Government of India. In 2006-07, Centre issued under recovery bonds to the extent of 42.

5 per cent to the upstream Oil companies like ONGC, GAIL and IOCL. "Of the 42.

5 per cent, the share of the upstream oil companies was 33 per cent, of which 85 per cent is for ONGC alone. The remaining portion of the subsidy has to be absorbed by the oil marketing companies from their margin itself," he said.

Asked whether there were any chance for crude oil prices to come down from the present USD 126, Sharma said: "It is anybody's guess. Fundamentals do not suggest that prices will come down.

" He said in another two weeks, ONGC would come out with its stance on how to implement the company's long-pending refinery project at Kakinada in Andhra Pradesh. PTI.

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