Oil PSUs want SBI to invest PF money in bonds
New Delhi   30-Jan-2008
Public sector oil marketing companies IndianOil, HPCL and BPCL have asked the government to issue necessary clarifications to the provident gratuity and superannuation funds to participate in the liquidation of the special oil bonds. In a letter to the labour ministry, IndianOil chairman and managing director Sarthak Behuria said that despite RBFs permission on the eligibility of these bonds for subscription by the PFs, the SBI (fund managers of the employee PF organization) was not participating in the liquidation of the special oil bonds on the grounds that a clarification on the issue is yet to be received from EPFO. Requesting the ministry to issue a clarification to SBI for considering special oil bonds in line with the government's notification, IndianOil chairman said, considering that special oil bonds are liquidated at spread over the prevailing G-Sec yields, EPFO will earn better yields by investing in these bonds as against investments in G-Sec. The government has been issuing special oil bonds at various intervals to the oil marketing companies (OMCs) in lieu of the under-realisation on sale of sensitive petroleum products. For the third quarter ended December 31, the government is likely to issue oil bonds for Rs 9,080 crore to the OMCs. While IndianOil is expected to get Rs 5,100 crore worth of oil bonds, HPCL will be given Rs 1,900 crore followed by BPCL at Rs 2,080 crore. Issuance of oil bonds to OMCs is in line with the government's policy to compensate the public sector oil marketing companies for their under-recoveries on domestic sale of sensitive petro products. The government had last week issued bonds worth Rs 11,256.92 crore to three PSU OMCs to compensate them for under-recoveries on selling petrol, diesel, domestic LPG and PDS kerosene in April-September 2007 period. For April-September losses, IndianOil received Rs 6,362.25-crore worth of oil bonds, BPCL Rs 2,539.13 crore and HPCL Rs 2,355.54-crore worth of bonds carrying coupon rate of 7.95% maturing in 2025.For October-December quarter, the retailers received Rs 7,083 crore from upstream firms and the remaining of the Rs 21,264.6 crore under-realisation on sale of petrol, diesel, LPG and kerosene came by IndianOil, BPCL and HPCL. The total under-realisation on sale of fuels during April-December has been pegged at Rs 47,628 crore, of which the government compensated Rs 20,336.92 crore through bonds. For the full fiscal, the aggregate loss of IndianOil, BPCL and HPCL on fuel sales is being pegged at Rs 71,808 crore.