India: Government Confirms Compensation Payments to State-Run Refiners

India’s Oil Secretary, GC Chaturvedi, has announced that the country’s Finance Ministery has granted compensation worth Rs15,000 to Indian Oil Cooperation (IOC), Hudustan Petroleum and Bharat Petroleum, which reported a combined loss of Rs 23,00 crore in the first half of this year as they sold fuel below market prices. IOC is expected to get roughly 50% of the payment, with the rest shared between the other state-run firms.

Management at the three companies have described the compensation as inadequate and late: executives speaking to local newspaper The Economic Times said that, if the payments had been made two weeks earlier, their performance would be improved. IOC Chairman RS Butola has already warned of the company’s parlous financial state, noting that debts of Rs 73,296 crore and difficulty obtaining further credit could constrain the company’s ability to import crude. 

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