Union Government decided to dole out 38500 Crore Rupees to Public Sector Oil Companies

The Union Government on 21 May 2012 decided to provide 38500 crore rupees as additional cash subsidy to public sector oil companies to compensate their loss incurred in fiscal year 2011-12. The cash subsidy would be an additional payout for the companies including Indian Oil Corp (IOC), Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL) which had received 45000 crore rupees from the government during the first nine months of 2011-12 financial year.

The three firms had recorded a total loss of  138541 crore rupees in 2011-12 on selling diesel, domestic LPG and kerosene at government- controlled rates that were way lower than market price. Together with the additional payout agreed, the government will make up 60% or 83500 crore rupees of the total revenue loss.