Goverment asks ONGC, OIL to pay Rs 36,900 crore in fuel subsidy.

NEW DELHI: The government has asked upstream oil firms like Oil and Natural Gas Corp (ONGC) to give about Rs 36,900 crore in fuel subsidy during April to December 2011, an official said today.

Fuel retailers Indian Oil Corp (IOC), Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) lost Rs 97,300 crore in revenue on selling diesel, LPG and kerosene at government controlled rates during the first nine months of current fiscal.

"Of this, the upstream companies have been asked to make good 37.91 per cent or Rs 36,894 crore," the official said.

The government regulates rates of diesel, domestic LPG and kerosene to keep inflation under check. The revenue loss incurred by retailers on selling fuel below cost is split between the government and the oil companies.

The government has so far provided Rs 30,000 crore in cash subsidy to make up for more than half of the revenues that IOC, BPCL and HPCL lost on fuel sales during first half.