The Union Govt decided to bear entire LPG subsidy for FY- 2015-16
The government has decided to bear the entire domestic
cooking gas subsidy in 2015-16.
Companies like ONGC, Oil India and Gail India have asked for removal of the subsidy burden on them.
Based on average crude oil price of $60/barrel, LPG subsidy
for FY- 2016 is estimated at R18,000 crore and assuming crude at $70/barrel, it
could be in the vicinity of Rs 25,000 crore.
For kerosene, the under-recovery burden is expected to be
around Rs 13,000 crore assuming average crude oil price at $60/barrel and it
could go up to Rs 16,500 crore if crude price moves northwards to around
In FY- 2014, the under-recovery on kerosene stood at Rs 30,575
crore while it was Rs 46,458 crore for LPG.
The budget allocation of Rs 30,000 crore (Rs 22,000 crore
for LPG and Rs 8,000 crore for kerosene) should be enough to meet fuel subsidy
bill in this fiscal.
ONGC, Oil India and GAIL (India) - forked out Rs 42,822
crore for the oil subsidy in FY- 2015.
The government paid another Rs 27,409 crore towards
The subsidy burden on upstream oil companies had increased
from Rs 32,000 crore (30% of the total under-recovery) in 2008-09 to Rs 67,021
crore (48% of the total subsidy bill) in FY- 2014.
Finance minister Arun Jaitley in his Union Budget for
2015-16 estimated petroleum subsidy at Rs 30,000 crore, 50.22% less compared
with the revised estimate of Rs 60,270.00 crore for 2014-15.
The 2015-16 Budget estimated
India’s subsidy bill at Rs 2.43 lakh crore, around 9% below the revised
estimate of Rs.2.66 lakh crore for 2014-15.
The reduction has been aided by the fall in the price of
crude oil, the decontrol of diesel and the direct benefit transfer scheme for
disbursing LPG subsidy.
The success of 5% disinvestment in India's largest explorer
ONGC is vital for the Narendra Modi-led government to meet its ambitious
disinvestment target of Rs 69,500 crore.
At present , ONGC is the biggest PSUs of India,overtaking NTPC.