FeSe with slight deficiency of Se is superconducting. Fe2SeTe has higher transition temperature than FeSe. The transition temperature further increases upon oxidation. We have calculated the band gap of Fe8Se6O2 as well as that of Fe2Se2. We find that the band gap reduces upon oxidation. The density-functional theory is used to optimize the cell parameter of Fe8Se6O2 which are found to be a = 6.9974 angstrom, b = 7.3016 angstrom and c = 5.2444 angstrom. The Fermi energy is found to be -4.472 eV for the polarized orbitals. The k-points for which the calculation has been done are G (0, 0, 0). F (0, 0.5, 0), Q (0, 0.5, 0.5) and Z (0, 0, 0.5). The unpolarized band gap varies from 0.19 eV at G point to 0.466 eV at F point. These gap energies of Fe8Se6O2 are smaller than those of Fe2Se2. Hence, we find that the reduced normal state gap has higher transition temperature.