India's ONGC sees lower fuel subsidy burden in 2009

India’s state-run Oil and Natural Gas Corp.’s (ONGC) fuel subsidy burden for the current year will be significantly lower than the previous year. This is possible if crude prices stay at the level they were on July 2 of around US$70 per barrel, said Chairman and Managing Director R.S. Sharma. India had unexpectedly raised gasoline and diesel fuel prices by as much as 10% on July 2, which marked the country’s first price increase this year. The government-controlled fuel pricing regime forces state-run producers to partially subsidize key petroleum products being sold by state oil marketing companies. Private refiners and retailers such as Reliance and Essar do not receive subsidies, making it difficult for them to compete in times of high global crude oil prices. (July 2, 2009)