Rupees 120 billion paid by Government of India to bail out oil companies

By ANI
Tuesday, January 19, 2010

NEW DELHI -Petroleum Minister Murli Deora on Tuesday disclosed that the Finance Ministry has granted 120 billion rupees to compensate losses incurred by government-run oil companies.

“Finance Ministry will pay for the losses incurred for Kerosene and LPG. Total of 210 billion rupees was required for recovering the losses. We have already got 120 billion rupees, now we will see how it (the remaining amount) will be recovered. The problem has been solved to some extent,” Deora said.

Petroleum and natural gas secretary, R S Pandey said that the amount would be paid only for LPG and kerosene.

“120 billion rupees have been accounted for, while marketing companies are doing these assessments, and then again finance ministry will be talked to. This is for only LPG and kerosene,” Pandey said.

The government has been issuing bonds to cover losses by state oil marketing companies like Indian Oil Corp and Bharat Petroleum Corp Ltd, which are required to sell fuel at lower than market price, to control inflation and help the poor.

In the fiscal year ending March 2009, the oil subsidy was 758.5 billion rupees as high global crude prices had inflated state-run oil firms’ losses.

The oil bonds have swelled debt for the Union Government, which is struggling with 16-year high fiscal deficit and record market borrowing of 4.51 trillion rupees for the fiscal year upto March 2010. (ANI)

Filed under: India

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Discussion
January 20, 2010: 9:56 am

In a recent interview, Central Vigilance Commissioner of India said that the corruption in India has reached higher level and taking place in a more centralised manner. One of the Ministries that he mentioned in which corruption is very high is Petroleum Ministry. Unjustified and unprecedented heavy price differential between Kerosene and Diesel / Petrol is one of the items of corruption in Petroleum Ministry headed by Murli Deora who himself is in thick of corruption charges being investigated by CBI. The price differential is leading to adulteration, environmental pollution and recurring corruption. Price differential need to be drastically reduced which would even reduce off take of Kerosene getting diverted for adulteration. Further, the relief amount should be given fast to IOC BPCL & HPCL on equitable distribution basis and HPCL should not be favoured.

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