NEW DELHI: The petroleum ministry will support disinvestment in two state-owned oil majors ONGC and Indian Oil Corporation only after there is clarity on the subsidy sharing formula even as the ministry is examining a proposal by the disinvestment department.

“IOC is bleeding due to the heavy subsidy burden and ONGC is also not sure about its contribution as upstream discount,” an oil ministry official said, adding that the ministry is not in favour of disinvestment at this stage.

Following the government’s June decision to decontrol petrol prices and raise prices of diesel, kerosene and cooking gas, the department of disinvestment has moved a proposal for selling 5% government equity in ONGC and 10% stake in IOC, which would help raise about Rs 21,000 crore this fiscal.

The disinvestment department has lined up five PSUs for stake sale, but needs at least one more big-ticket offer to raise the budgeted Rs 40,000 crore.

“We have received a note from the department of disinvestment (DoD) that says they have the approval of the finance ministry for divestment of government stake in ONGC and IOC,” oil secretary S Sundareshan said on Friday adding that proposal was being considered. “We are examining the proposal and are yet to take a view (on the proposal),” he said.

Though the decontrol of petrol pries and increase in prices of other fuels have helped boost shares prices of oil companies, the lack of clarity on the subsidy sharing formula is still a concern.