'Subsidy burden on oil companies likely to touch Rs 1,80,000 cr'

Mayiladuthurai, Tamil Nadu, May 11 (UNI) The subsidy burden among the PSU oil companies is expected to touch a staggering all time high of Rs 1,80,000 crore from Rs 76,000 crore last year due to the relentless increase in global crude oil prices, ONGC Chairman and Managing Director R S Sharma said today.

Talking to mediapersons after inaugurating ONGC's first pilot project in India to extract Helium from natural gas at its Kuthalam basin in Nagapattinam district, he said the under recovery to oil companies in view of the surging global crude prices was Rs 54,000 crore in 2006-07 and it went up to Rs 76,000 crore during 2007-08.

In the current fiscal, the under recovery will touch a whopping Rs 1,80,000 crore, he added.

''As far as ONGC is concerned, we get international parity price and from quarter to quarter we get subsidy portion from the Centre in the form of bonds,'' he said.

In 2006-07, the Centre issued under recovery bonds to the tune of 42.5 per cent to the upstream oil companies like ONGC, GAIL and IOC.

Of the 42.5 per cent, the share of the upstream oil companies was 33 per cent, of which 85 per cent was for ONGC alone. The remaining portion of the subsidy has to be absorbed by the oil marketing companies from their margin itself, Mr Sharma said.

Asked whether there were any chance of the crude prices relenting from the present 126 dollars per barrel, Mr Sharma said, ''fundamentals do not suggest that prices will come down.'' He said that in another two weeks, the ONGC will spell out its stand with regard to the implementation of its long-pending refinery project at Kakinada in Andhra Pradesh.

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