Budget 2024: Oil firms capex of ₹30,000 crore revised down and deferred to FY25

The state-owned oil marketing companies (OMC) will raise funds after March 31 as the OMC capex of ₹30,000 crore has been revised down and deferred to FY25, sources have confirmed to CNBC-TV18 on Thursday, February 1.

OMCs have sought lower capex of ₹15,368 crore on cash flow projections and requirements for FY24 versus an earlier budget aim of ₹30,000 crore.

In the Budget 2023-24, the Finance Ministry had earmarked ₹35,000 crore for priority capital investments towards energy transition, energy security, and attaining net-zero objectives by the Ministry of Petroleum and Natural Gas.

Of this, ₹30,000 crore was earmarked as capital support to oil marketing companies including Indian Oil Corporation (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) for green energy and net zero initiatives, and the remaining ₹5,000 crore was reserved for the purchase of crude oil for caverns at Mangalore and Visakhapatnam to safeguard country’s reserve against any supply disruptions. However, both plans have now been cut short by the finance ministry.

"During the Expenditure Finance Committee meeting held on November 30, 2023, it was decided a maximum of ₹15,000 crore could be provided for equity infusion into OMCs in FY 2023-24," the finance ministry said in a post on X earlier.

Finance Secretary T V Somanathan said, “The capital requirements of OMCs were reassessed, and deferred to the next financial.”