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

New Delhi, Jan. 19 (ANI):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)