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Economy Dec 14, 2012

Additional oil subsidy done in view of difficult situation: FM

New Delhi: The government today justified its proposal for additional oil subsidy of Rs 28,500 crore, saying it was being done in view of "difficult situation" as members in the Lok Sabha attacked the move.

"I share the concerns of the consumers, although I want this House to know that these difficulties are difficulties which have to be shared by everybody and today what we are providing is only a part of the under-recovery," he said.

The Minister said the subsidy bill has gone up substantially over the years. Reuters

Chidambaram said this while winding up a discussion on supplementary demands for grants that sought Parliament's approval to raise expenditure on account of subsidies to petroleum companies by Rs 28,500 crore.

The Minister said the subsidy bill has gone up substantially over the years, even as the upstream companies continued to support the oil marketing companies (OMCs).

"What we are now doing is providing an additional Rs 28,500 crore in the supplementary. It is my hope that the upstream can provide a little more and some money can come from OMCs," Chidambaram said.

"A large part of the under-recovery remains unprovided and we have to depend upon the upstream companies and the OMCs themselves to meet the under-recoveries," he added.

Earlier participating in the discussion, a number of members including those from TMC, RJD and BJD criticised the government's move to provide more funds to oil companies at a time when subsidy on their products was being reduced. In this context, they strongly attacked the six-cylinder cap on subsidised LPG per connection per year as also the increase in diesel prices.

Saugata Roy (TMC) referred to Reliance's gas exploration activities in KG Basin and alleged that the company was trying to control the price. He alleged that "efficient minister" S Jaipal Reddy was divested of Oil portfolio because of his differences with Reliance.

PTI

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