Oil and Natural Gas Corp, Oil India and GAIL (India) sell crude and fuels like cooking gas at discounted rates to partly compensate retailers for losses they incur on selling fuels at government-set cheaper rates.
Under the new rules, which are applicable only for the three months to June and would need finance ministry approval to be extended, upstream firms will not have to pay any subsidy as long as crude prices average USD 60 or less, the sources said.
For prices between USD 60 and USD 100 a barrel, the companies will have to give a discount of 85 per cent of the incremental price, said the sources who declined to be named as they are not authorised to speak to media.
Last quarter, the government had exempted ONGC, Oil India, and GAIL from paying a subsidy after a crash in global crude prices. Currently global oil prices are hovering at about USD 66 a barrel.