Mumbai: Oil and Natural Gas Corporation (ONGC) said on Tuesday that one-time hike in diesel price is the only option to combat rising fuel prices globally.
"We will be facing a far larger subsidy burden in FY'14. A one-time diesel price hike is the only option to combat rising fuel prices globally," ONGC Chairman Sudhir Vasudeva said on the sidelines of India Oil & Gas Review Summit here.
Vasudeva said prices will have to increase as oil companies are barely recovering costs.
He said that the risk of subsidy burden in 2013-14 is higher than in FY'13. The government may have to pass on additional burden to upstream companies that are responsible for exploration and production of oil.
ONGC paid Rs 49,421 crore, which is Rs 5,000 crore more than what it paid in the previous year and that too despite additional burden of about Rs 5,000 crore of cess.
In 2013-14, the under-recoveries would be around Rs 80,000 crore and the government will pay Rs 20,000 crore and the E&P companies will still pay Rs 60,000 crore.
With today's projection of under-recoveries going to Rs 180,000 crore and if the government is not in a position to give because of fiscal deficit, oil marketing companies (OMCs) certainly are not in a position to give because of their large borrowings. However, if this is passed on to companies like ONGC and Oil India, then it is a matter of concern, he said.