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Comfort Letter issued by Finance Ministry for sanction of 25000 crore Subsidy

Feb 12, 2013 04:43 IST

Indian Oil CorpThe Union Finance Ministry in second week of February 2013 decided to pay an additional cash subsidy of 25000 crore rupees for the state owned fuel retailers. The subsidy package is being given to help the retailers in making up of the revenue that they lost while selling cooking and auto fuel below cost in the current fiscal year of April to December 2012.

A comfort letter was issued on 7 February 2013 by the Union Finance Ministry to the Indian Oil Corp. Ltd (IOC), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL) that sanctioned sanctioning 25,000 crore rupees as the part of the revenue lost by them on selling diesel, domestic LPG and kerosene below cost or at subsidized cost. The sanctioned subsidy meets about 44 percent of the revenue lost by the three firms of 124854 crore rupees together on the Sale of cooking and auto fuels in a period of April to December in 2012.

As per the latest sanctions reveled IOC, BPCL and HPCL would get 13474.56 crore rupees, 5987.25 crore rupees and 5538.19 crore rupees respectively.

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