News Release Details
ONGC for rejig in govt's oil subsidy policy
Kolkata 28-Jun-2007
The government's oil subsidy policy, which has been in place for the past few years, may be in for a rejig. It is deliberating on a proposal put forth by oil major ONGC, by which the subsidy would be calculated after taking into account the rupee-dollar parity. Put simply, ONGCs sale of crude will be billed in rupee terms instead of dollars. The company gave a discount of $22/barrel to foot a pan of the subsidy bill in 2006-07. ONGC, which pays a pan of the oil subsidy by providing huge discounts on crude oil, has seen a significant dip in its profits in the fourth quarter of 2006-07. The appreciating rupee has translated to a higher outgo for the company, which has impacted its bottom-line. Senior officials at ONGC said they are in discussion with the1 ministry to see if the changes in the billing system to rupee denomination can be taken into account while calculating the subsidy outgo. A final decision will be taken next month, an official said. He, however, said the government would take a conscious decision as the current practice is hurting the oil producers, but is beneficial to the refineries. Oil producing industries have demanded that the government should save them from the impact of stronger rupee visa-vis dollar, an ONGC official said.
Kolkata 28-Jun-2007
The government's oil subsidy policy, which has been in place for the past few years, may be in for a rejig. It is deliberating on a proposal put forth by oil major ONGC, by which the subsidy would be calculated after taking into account the rupee-dollar parity. Put simply, ONGCs sale of crude will be billed in rupee terms instead of dollars. The company gave a discount of $22/barrel to foot a pan of the subsidy bill in 2006-07. ONGC, which pays a pan of the oil subsidy by providing huge discounts on crude oil, has seen a significant dip in its profits in the fourth quarter of 2006-07. The appreciating rupee has translated to a higher outgo for the company, which has impacted its bottom-line. Senior officials at ONGC said they are in discussion with the1 ministry to see if the changes in the billing system to rupee denomination can be taken into account while calculating the subsidy outgo. A final decision will be taken next month, an official said. He, however, said the government would take a conscious decision as the current practice is hurting the oil producers, but is beneficial to the refineries. Oil producing industries have demanded that the government should save them from the impact of stronger rupee visa-vis dollar, an ONGC official said.