Dividend from OMC’s not getting reduced, says official

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Economic Affairs Secretary Subhash Chandra Garg on Tuesday dismissed media reports which suggested that dividends from oil marketing companies (OMC) as well as revenue from disinvestment had gone down.

“… published an item attributed to unnamed Finance Ministry official about dividend getting reduced from oil marketing companies, subsidies cut, lesser disinvestment revenue etc. This is completely fabricated. Nothing of this is true at all,” Garg tweeted.

Last Thursday, the Centre reduced excise duty by Rs 1.50 per litre on both petrol and diesel and asked the OMCs to extend further relief of Re 1 a litre. The Centre even asked the states to provide a matching relief of Rs 2.50 per litre through Value Added Tax cuts.

It is feared that the borrowings of these OMCs may increase and it can be partially offset if the dividend payouts are reduced.

Further, volatile market conditions are making it difficult for the government to meet its disinvestment target of Rs 80,000 crore this fiscal. Last year, state-run Oil and Natural Gas Commission’s acquisition of the government stake in HPCL had helped the government to exceed its sell-off target.