By Rakteem Katakey May 20 (Bloomberg) -- Oil & Natural Gas Corp.<http://www.bloomberg.com/apps/quote?ticker=ONGC%3AIN>, India’s biggest energy exploration company, and GAIL India Ltd.<http://www.bloomberg.com/apps/quote?ticker=GAIL%3AIN>will pay “around 9.4 billion rupees” ($197 million) in additional subsidies to state refiners for sales of fuels below cost.
The refiners including Indian Oil Corp.<http://www.bloomberg.com/apps/quote?ticker=IOCL%3AIN>, the nation’s largest, sell oil products at fixed prices to curb inflation and get government bonds and discounts from state-run oil and gas producers as partial compensation. ONGC was “provisionally exempted” by the government from subsidizing the refiners in the three months ended March 31, Chairman and Managing Director R.S. Sharma<http://search.bloomberg.com/search?q=R.S.+Sharma&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>said March 26. “Yes, we had told ONGC they wouldn’t have to pay any subsidy for the quarter,” Oil Secretary R.S. Pandey<http://search.bloomberg.com/search?q=R.S.+Pandey&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>said by telephone from New Delhi today. “Oil prices have risen since then and these are the final adjustments.” The government hasn’t yet informed ONGC about the subsidy it will bear in the fourth quarter, Sharma said. “I am expecting to be told today,” he said. ONGC shares gained 5 percent to 1,045.10 rupees at 10:19 a.m. in Mumbai, extending a 22 percent advance over the past two days. The benchmark Sensitive Index climbed 0.1 percent. The explorer’s share of subsidies in the first nine months of the year ended March 31 was 273.7 billion rupees, according to a statement on the ONGC Web site<http://www.ongcindia.com/press_release1.asp?fold=press&file=press376.txt>. Subsidies of 49 billion rupees along with a 56 percent decline in crude prices drove down ONGC’s profit<http://www.bloomberg.com/apps/quote?ticker=ONGC%3AIN>43 percent in the quarter ended Dec. 31. Oil Prices Crude oil prices in New York have increased 36 percent since January after falling more than $100 from a record in July, pushing up costs for Indian refiners. Oil for July delivery rose as much as 0.8 percent to $60.60 a barrel on the New York Mercantile Exchange and was at $60.48 a barrel at 11:49 a.m. Singapore time. “When we had told ONGC they wouldn’t be paying any subsidy, oil was at $40-$44 a barrel,” Pandey said. “It’s gone up significantly since then and the refineries have started losing some money.” ONGC, GAIL, India’s gas distribution monopoly, and explorer Oil India Ltd.<http://www.bloomberg.com/apps/quote?ticker=OINL%3AIN>have given discounts worth around 320 billion rupees to refiners in the nine months to December, Pandey said. The government took $20 billion from ONGC over six years to subsidize state-run refiners, Goldman Sachs Group Inc. said in a report dated March 5. To contact the reporter on this story: Rakteem Katakey<http://search.bloomberg.com/search?q=Rakteem+Katakey&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>in New Delhi at [email protected] -- God gave me nothing i wanted, He gave me everything i needed. Swami Vivekananda --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
