IndianOil to decide timing of public issue only in FY '12
Haldia   26-Dec-2010

State-run IndianOil’s proposed public issue will not come this year and its launch time will be decided by the government in the next financial year, a senior oil ministry official said. “It is not necessary that the offer will have to hit the stock market this financial (year),” petroleum secretary S Sundareshan said here on Sunday.

The centre has not taken any final decision on the proposed follow-on public offer, he told reporters on sidelines of an event organised by IOC’s Haldia refinery.

The oil secretary’s comments contradict IOC chairman BM Bansal’s statement earlier this month that the company expected to launch its follow-on public offer (FPO) by January ends. The department of divestment had also lined up the IOC’s public offer for the current financial year.

Officials said that the IOC’s follow-on offer was postponed due to a surge in global crude oil prices which breached last two year’s record at around $94 a barrel leading to huge revenue loss for IOC.

Mr Sundareshan said that the government would take steps to save state-run oil marketing companies selling fuel at controlled rates below cost. “During the last few years under-recoveries (revenue losses) by oil marketing companies ranged between Rs 50,000 crore and Rs 103,000 crore. Every year, there has been a burden sharing formula which is decided at the end of a financial year or sometimes the early part of the new financial year,” he said.

“We are in constant dialogue with the centre, solutions will be found and the oil marketing companies will not be allowed to suffer,” he added.

Earlier, addressing a gathering at Haldia refinery, oil minister Murli Deora said, “Our government is committed to the twin objectives of protecting the interest of the common man, particularly the vulnerable sections of the society as also to protect the financial health of the public sector oil marketing companies.” He said the government was in the process of finalising a scheme that would provide a one-time financial assistance of Rs 1,400 to 35 lakh poor households in getting cooking gas connections.

The scheme is expected to cost about `490 crore, he said. “Half the fund for the scheme will be provided through budgetary support and the balance from the corporate social responsibility funds of the oil companies,” he said.

IOC has expanded the capacity of the Haldia refinery by 1.5 million tones per annum to 7.5 MTPA with an investment of Rs 2,869 crore.

“The project will enable IndianOil produce high speed diesel conforming to Euro-III and IV standards,” said the finance minister Pranab Mukherjee who was there to preside the function.