The Finance Ministry has reduced capital allocation to state-owned Oil Marketing Companies (OMCs) to Rs 15,000 crore from the earlier provision of Rs 30,000 crore.
The Capital allocation was aimed to support the investment in energy transition projects and also compensate the companies that had suffered huge losses in 2022 due to the spike in crude oil prices. The Budget (for 2023-34) provides Rs 35,000 crore for priority capital investments towards energy transition and net zero objectives, and energy security by the Ministry of Petroleum and Natural Gas Of this, Rs 30,000 crore was towards capital support to oil marketing companies IOC, BPCL and HPCL for green energy and net zero initiatives, and the remaining for purchase of crude oil for caverns at Mangaluru in Karnataka and Visakhapatnam in Andhra Pradesh.
As of now, the government has deferred the plan for filling the strategic reserves.
The Finance Ministry shared an update on X (formerly Twitter) “During the Expenditure Finance Committee meeting held on November 30, 2023, it was decided that a maximum of ₹15,000 crore could be provided for equity infusion into OMCs in FY24, Based on the recommendations of the EFC, approval of the CCEA (Cabinet Committee on Economic Affairs) is being sought,” it said.
While the government has not given any official reason for the change in budgetary allocation, the move may impact clean energy initiatives for the OMCs.
