Before the budget, the government has given a big blow to the oil companies. While announcing the shocking decision, the government said that it is growing in favor of green energy and is continuously supporting projects related to green energy. Due to which the government has halved its equity investors from government oil marketing companies to Rs 15,000 crore.
Finance Minister Nirmala Sitharaman, while presenting the general budget for the financial year 2023-24 on February 1 last year, announced equity investment of Rs 30,000 crore in Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL). Was announced.
This investment was to be made to support the investments made by these three companies in energy transition plans. Along with this, the Finance Minister had also proposed Rs 5,000 crore to buy crude oil to fill the strategic oil reserves in Mangalore in Karnataka and Visakhapatnam in Andhra Pradesh. It was to be used to protect against any supply disruption. The Finance Ministry said that in view of the emerging trends in the oil markets, that plan has also been postponed.
Billions of dollars invested in green energy
Other state-run oil companies such as ONGC and GAIL (India) Limited have also invested billions of dollars to achieve net zero carbon emissions. However, equity support was limited to three companies. These companies had suffered huge losses in 2022 due to selling petroleum products at prices below cost. Giving details of the budget announcements on social media platform X, the Finance Ministry gave information about halving the equity support and deferring the strategic oil reserve.
35 thousand crores were to be released
The government said the Ministry of Petroleum and Natural Gas has provided Rs 35,000 crore in the Budget for FY 2023-34 for priority capital investment for energy transition and net zero carbon emission objectives and energy security. Of this, Rs 30,000 crore was for capital support to oil marketing companies IOC, BPCL and HPCL for green energy and net zero carbon emission initiatives. The rest were for the purchase of crude oil for strategic underground storage areas in Mangalore and Visakhapatnam.
No reason given
During the meeting of the Expenditure Finance Committee held on November 30, 2023, it was decided that a maximum of Rs 15,000 crore can be given for equity investment in oil marketing companies in the financial year 2023-24. However, the Finance Ministry has not given details of the reasons for the decision. Industry sources said that this decision could be related to the increase in profit of the three companies in the current financial year. Quarterly results of all three companies may come soon. It is estimated that the profit of companies can reach Rs 75 thousand crore in three quarters.
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