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IOC may get 1.3 bln rupees as Jan-Mar kerosene subsidy, HPCL 270 mln

Wednesday, Jun 10, 2020

 

–Source: Oil PSUs to not absorb any subsidy loss on kerosene Jan-Mar

–Oil PSUs' Jan-Mar kerosene subsidy loss at 1.8 bln rupees

 

By Sukalp Sharma

 

NEW DELHI – Indian Oil Corp Ltd and Hindustan Petroleum Corp Ltd are likely to receive around 1.3 bln rupees and 270 mln rupees, respectively, from the government as compensation for losses on sale of subsidised kerosene in the March quarter, sources told Cogencis.

 

The public sector oil marketing companies' total subsidy loss on kerosene sales for the quarter was a little over 1.8 bln rupees, which will be borne fully by the government, sources said.

 

The other public sector fuel retailer Bharat Petroleum Corp Ltd has already detailed its earnings for Jan-Mar and its under-recovery on sale of subsidised kerosene for the quarter stood at around 220 mln rupees, which will be recompensed by the government.

 

Hindustan Petroleum is scheduled to release its earnings for the March quarter on Jun 16, while Indian Oil has not yet announced a date for detailing its earnings for the quarter.

 

The three public sector fuel retailers bear a temporary loss on selling subsidised kerosene under the public distribution system, and subsidised cooking gas. Usually, the government compensates these companies entirely for these subsidy losses.

 

Pricing of petrol and diesel is already market-linked, and the government compensates retailers for subsidised sale of liquefied petroleum gas on a regular basis through a separate payment mechanism, which is independent of kerosene subsidy payouts.

 

At 1225 IST, shares of Indian Oil traded at 90.20 rupees on the National Stock Exchange, 0.5% lower from the previous close. Shares of Bharat Petroleum were down 1% at 377.60 rupees.  End

 

Edited by Vandana Hingorani

 

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This copy was first published on the Cogencis WorkStation

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