New Delhi, Jan 14 (ANI): Petroleum Minister Murli Deora, who met Union Finance Minister Pranab Mukherjee on Thursday to seek compensation for the public sector oil firms for their losses, said the Finance Ministry has offered less than half of the amount asked for.

The Finance Ministry has offered less than half of the Rs 31,700 crore asked by Deora to make up for revenue losses incurred by the state-owned retailers on sale of LPG and kerosene.

Petroleum Minister Murli Deora said, “No decision was taken in the meeting.”

The main issue in today’s meeting was how much of the revenue loss should the government bear, claimed sources.

The Finance Ministry feels that current year is not an “exceptional” period, when global oil rates have been at a moderate level and so the 2006-07 formula of the government picking up one-third of the revenue loss on fuel sales should apply.Indian Oil, Bharat Petroleum and Hindustan Petroleum are projected to lose about Rs 45,000 crore on selling petrol, diesel, domestic LPG and kerosene below cost.The Finance Ministry is willing to meet one-third of this by way of either cash or bonds.

Moreover, the Petroleum Ministry wants the government to credit the July 2009 assurance of making up for the entire revenue loss on domestic LPG and kerosene.

As per the July understanding, the losses on petrol and diesel were to be made good by upstream firms like ONGC.

The Finance Ministry is expected to revert on subsidy for oil companies in one or two days.

Petroleum Secretary R S Pandey said, “We explained the under recoveries (revenue loss on fuel sales). Finance Ministry will now revert to us on the issue.”Oil India Chairman N M Borah said, ” Mukherjee was ’sympathetic’ to the losses fuel retailers were incurring and appreciated the limited capacity upstream firms had to contribute to subsidy sharing.”

On account of the prevailing high inflation, the increasing fuel prices were ruled out at the moment, said sources.

Deora had last month raised the issue with Prime Minister Manmohan Singh and the same again figured during a review meeting with Singh on the oil sector on Wednesday evening.The government issues oil bonds to compensate for this loss.

But the Finance Ministry had deferred issuing oil bonds to OMCs in the third quarter this year.

Reports suggested that the Finance Ministry was in favour of scrapping the practice of issuing oil bonds altogether, leaving oil-marketing companies (OMCs) in despair.

Planning Commission deputy chairman Montek Singh Ahluwalia and Kirit Parikh, who heads a high-level committee on fuel pricing, also attended the meeting, besides the heads of the OMCs. (ANI)