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India’s state-owned OMCs receive rest of cash subsidy

The union government has released the balance of the cash subsidy resulting from under-recoveries in the amount of Rs140 billion (US$3 billion) to India’s state-owned oil marketing companies (OMCs) Indian Oil Corp. Ltd., Hindustan Petroleum Corp. Ltd. and Bharat Petroleum Corp. Ltd. Total under-recoveries for the Fiscal Year ending March 31, 2010 was Rs460.51 billion (US$9.8 billion). Until recently, India’s state-owned OMCs sell gasoline, diesel fuel and cooking fuels at government-mandated discounted prices. Gasoline prices were deregulated from June 26, but diesel fuel and cooking fuel prices continue to be controlled by the government. The government shares the losses that state-owned OMCs through cash subsidies while state-owned upstream companies such as Oil & Natural Gas Corp., Oil India Ltd. and GAIL (India) give discounts on crude oil and products. (August 23, 2010)