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GAIL seeks exemption from payment of fuel subsidy

B. C. Tripathi

NEW DELHI: State-run GAIL (India) on Monday said it had urged the government to exempt it from payment of fuel subsidies as it does not get any upside from rise in crude oil or natural gas prices.

GAIL, along with Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL), has to compensate for at least one-third of the revenue that fuel retailers lose on selling auto and cooking fuel at the government-controlled rates.

“We have been saying that GAIL should be out of subsidy sharing mechanism as unlike oil and gas producer, we do not get any incremental revenue on increase in oil and gas price,” GAIL Chairman and Managing Director B. C. Tripathi told reporters here.

Felicitation

Mr. Tripathi was speaking at the felicitation programme organised for the 51 underprivileged students, who, with the help of GAIL, made it through to the IIT/JEE, ISRO, UPTU and AIEEE entrance examinations. The 51 successful students are the result of GAIL's special CSR (corporation social responsibility) programme, GAIL UTKARSH, being run at Kanpur.

Mr. Tripathi said various government committees in the past have felt that GAIL, which essentially is a gas transmission and marketing company, should be kept out of the subsidy sharing mechanism. Upstream firms contributed Rs.30,297 crore of the total revenue loss of Rs.78,189 crore in 2010-11. GAIL's share in this was Rs.2,111 crore.

After last week's government decision to raise diesel, domestic LPG and kerosene prices together with customs and excise duty reductions to cut revenue loss of fuel retailers, he said GAIL's subsidy share during the current fiscal was likely to come down to 2009-10 levels which was around Rs.1,327 crore.

He said GAIL would import at least one shipload of liquefied natural gas (LNG) every month to make up for the fall in domestic gas output.

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