New Delhi: State-run oil companies have spent 13% of their annual capex target of Rs 98,500 crore in the first quarter of the financial year with Oil India spending at the fastest clip and GAIL the slowest.The government is banking on accelerated spending by public sector companies to revitalize the economy damaged by the pandemic and lockdowns. Finance minister Nirmala Sitharaman has been regularly engaging with chiefs of state-run companies to prod them to speed up spending.
Resource-rich oil and gas companies, usually the biggest spenders among state firms, have spent Rs 12,900 crore in April-June. This is only 13% of the annual target mainly because of the lockdown and inability to get workers back on to sites after restrictions were eased, an industry executive said. More lockdowns in states have also slowed projects.
Oil India has spent 21% of its annual target of Rs 3,877 crore while its bigger rival, ONGC, has spent 17% of its planned outlay of Rs 32,502 crore. The pandemic has slowed global movement of equipment, experts and material, delaying execution of projects. This prompted ONGC to cut its annual capex plan by 15%. ONGC Videsh, the overseas arm of the state-run explorer, spent a fifth of its planned annual capex during the quarter.
GAIL, the country’s largest gas marketer and pipeline operator, is at the bottom of the pile in capital spending during the quarter. GAIL, which is executing some key pipeline projects, spent Rs 400 croe, or just about 7% of its annual capex target of Rs 5,412 crore.
Indian Oil, the country’s largest refiner and fossil fuel retailer, used up a tenth of its targeted capex of Rs 26,233 crore. Two other state-run refiners, HPCL and BPCL, spent 8% of their targeted capex each.
Indian Oil and HPCL have said their capex plans are unaffected by the pandemic.
Source: ET Markets