Sorry, but no cash relief for now, oil marketing companies told
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There is no immediate respite in sight for oil marketing firms such as IOC, HPCL and BPCL facing problems in servicing their rising debt.
The finance ministry is unlikely to provide any cash subsidy to these companies before the beginning of next year as this year's budget towards subsidy has been exhausted and a Parliamentary approval for supplemenatries are yet to be taken up by the ministry.
Addressing the media at the economic editors' conference, the petroleum ministry clarified that the oil marketing companies would have to wait till January by when the finance ministry's response on compensation would be clearly known.
GC Chaturvedi, petroleum secretary said, "The money will have to come from the finance ministry when the supplementary grant comes in the month of January. Till that time OMCs are on their own."
A finance ministry official said that compensation to oil marketing firms would be met in full but refused to give the exact timing for it.
Though two quarters have ended in this financial year, oil firms are yet to get any cash support from the government for providing petroleum products at lower than market rates to consumers.
The oil ministry has sought compensation to the tune of R61,000 crore for the first two quarters of current fiscal. The total under-recoveries for the same period stands at R89,000 crore.
With the finance ministry silent on the requisite budgetary support, oil marketing companies are fearing a rating downgrade.
Borrowings of the government-owned entities are poised to touch record highs this fiscal.
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