Oil marketing companies incur huge loss
Guwahati   17-May-2008
Oil marketing companies would have to bear losses to the tune of Rs 16,700 crore,-even after the Centre issues oil bonds to cover 50 per cent of their under- recoveries in 2007-08, IndianOil Chairman S Behuria said today. Although losses of state-run oil companies' on account of selling fuel below cost price was to the tune of Rs 78,000 crore, the Finance Ministry has pegged the amount at just Rs 70,000 crore for the purpose of compensation, he told reporters here. On a request from the Petroleum Ministry earlier this week, the Finance Ministry is understood to have agreed to issue oil bonds worth Rs 35,300 crore for 2007-08 fiscal, of which nearly Rs 23,000 crore worth bonds have been issued for the period April-December 2007. The Centre had also conveyed that upstream oil companies like the ONGC and GAIL would be giving Rs 23,000 crore to the oil companies, he said, adding, the rest had to be borne by the oil companies. IndianOil alone would have to bear Rs 9,600 crore losses for the last fiscal, he said. Painting a gloomy picture for the oil industry, he said he had no hopes that the crude price would come down at least for the present. This would have a cascading effect on the oil companies in India as the 'under-recovery' would mount to Rs 1.9 lakh crores this fiscal, he said.