ONGC, IOC, others to shell out ₹1.11L cr capex in FY23

SUBSIDY OUTGO IN FY22 HAS BEEN PUT AT ₹3,400 CRORE, LOWER THAN ₹12,480 CRORE BUDGETED AT THE BEGINNING

NEW DELHI: State-owned oil firms such as ONGC and IOC will invest over ₹1.11 lakh crore in the next fiscal year starting April as they supplement the government’s massive spending programme to spur economic growth.

Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), GAIL (India) Ltd, Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL) and Oil India Ltd (OIL) will together make a 7.4% higher capital expenditure in the 2022-23 fiscal (FY23). The capex spending of ₹1.11 lakh crore in 2022-23 compares with a revised estimate of ₹1.04 lakh crore for the current fiscal year, according to Union budget documents.

In the Union Budget for 2022-23, the government continued on its path of supply-side economics and plans to boost investments, thereby increasing jobs and consumption instead of directly announcing any monetary relief to the lower end of the population.

None of the oil PSUs gets any subsidy support from the government. The government has provided a small ₹4,000 crore subsidy on domestic cooking gas (LPG) in the next fiscal. The subsidy outgo in the current fiscal has been put at ₹3,400 crore, lower than ₹12,480 crore budgeted at the beginning of the fiscal, the documents showed.

ONGC has planned a capital expenditure (capex) of ₹29,950 crore in FY23, marginally lower than the revised estimated expenditure of ₹30,500 crore in the current fiscal. The current fiscal spending is higher than ₹29,800 crore planned spending at the beginning of the year.

IOC, the nation’s largest oil refining and fuel marketing company, has an outlay of ₹28,549 crore for the next year, almost the same as FY22.

Gas utility GAIL will invest ₹7,500 crore in the expansion of pipeline grid and petrochemical plants, up from ₹7,160 crore revised expenditure in the current fiscal (FY22).

Privatization-bound BPCL’s ₹10,000 crore planned investment includes ₹8,120 crore in refinery and fuel marketing and another ₹500 crore in petrochemicals. This compares with spending of ₹10,500 crore in the current fiscal. HPCL has a total outlay of ₹14,500 crore for the next fiscal, 7% over the estimated spending in the current year.

OIL’s capex for FY23 is marginally higher at ₹4,302 crore.

ONGC’s overseas investment arm, ONGC Videsh has been a drag on achieving the spending targets for the current fiscal.