India’s oil producers asked to take on additional subsidies

The government of India has asked three upstream public sector oil firms—ONGC, Oil India and GAIL India—to take on additional subsidies to support below-market pricing of key petroleum products at the retail level. ONGC Chairman and Managing Director A. K. Hazarika, states that, “We have been told that our upstream subsidy contribution for 2010-2011 fiscal year will be 38.7% instead of the one-third subsidy we have been sharing for the past four years.”  This additional burden will reduce ONCG’s net profit by Rs 2,000 crore (US$20 billion).  (May 21, 2011)