Ambani approaches petro ministry for subsidy bailout

NEW DELHI: Reliance industries chairman, Mukesh D Ambani on Monday met top officials in the petroleum ministry. It is understood that Mr Ambani had raised the issue of hardships faced by private oil companies due the cost disadvantage vis-a-vis public sector oil firms.

According to sources, Mr Ambani met petroleum secretary MS Srinivasan and joint secretary Ajay Tyagi on Monday evening to discuss the ‘subsidy issue.’ Confirming Mr Ambani’s meeting to top brass in the petroleum ministry, an official in RIL said that “it was a courtesy visit.” Reliance has been facing cost disadvantage due to government’s subsidy extended to oil PSUs. Unable to sell oil products at market prices, it has demanded the government to end the disparity or offer some bailout package to private oil companies.

On the previous occasions, the government had refused to extend any bailout package to RIL. It had advised private oil companies to find innovative ways to remain afloat, suggesting RIL to depend on its gains from petrochemical and refining to net out the losses from marketing. Even as government had adopted a tough stand, RIL president (refinery business) P Raghavendran had recently told ET that the company was ‘hopeful’ (about a bailout package).

According to the company sources, the oil marketing activities of RIL are severely hit due to the cost disadvantage. “We are working against all odds. PSU oil marketing companies are getting about Rs 5.77/lt subsidy in diesel and about Rs 3.39/lt subsidy in petrol,” a company source said. The company has already put a brake on its retailing activities. It is, however, keeping its network alive.