Government cuts outlay for equity in energy transition projects of big 3 oil firms by Rs 15000 crore

The government has slashed by half to Rs 15,000 crore, the allocation for equity infusion in the energy transition projects of Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd, the Finance Ministry has said.

The Finance Ministry announced the decision to reduce the equity support and defer filling strategic oil reserves in a post on X.

In the Union Budget for 2023-24, Finance Minister Nirmala Sitharaman had announced an equity infusion of Rs 30,000 crore to support the energy transition plans of the three oil marketing companies.

She had also proposed an outlay of Rs 5,000 crore for buying crude oil to fill strategic underground coastal storages at Mangaluru in Karnataka and Visakhapatnam in Andhra Pradesh to provide a cushion against disruption in crude supply.

This plan has also been deferred in view of emerging trends in the oil markets, the Finance Ministry said.

The equity support was extended to the three oil companies to compensate them for the losses they made since they were asked not increase petrol, diesel and LPG prices to protect consumers when crude prices had soared in the global market due to the Russia-Ukraine war.