Govt may issue Rs 14,500-cr bonds to oil cos
New Delhi   19-Jul-2008
The Government is likely to issue around Rs 14,500 crore oil bonds to state-run oil marketing companies during August-September, a senior Finance Ministry official said on Friday. "These are residual oil bonds of last year (ended March) and will be part of first supplementary demand for grants," the official said. The monsoon session of Parliament is scheduled for August 11 - September 5. Oil retailers' gross revenue loss for 2007-08 on subsidised sale of oil products was pegged at Rs 70,600 crore and 50 per cent of this under-recovery was to be compensated by issue of oil bonds. The government has so far issued oil bonds totaling Rs 20,554 crore for the last financial year. He, however, said the Finance Ministry was yet to hear an official word on revenue loss sharing formula for the current financial year. "We have been hearing that around Rs 95,000 crore in oil bonds will be issued this year. But this is yet to be approved by the Cabinet Committee on Economic Affairs," the official said. In the current year, oil retailers' gross revenue loss is pegged much higher at Rs 2,45,000 crore due to a sharp spurt in crude oil prices though the Government has now appointed a committee to look into the calculation of under-recoveries. The three refining-cum-marketing firms - Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd - have now been selling oil bonds to the Reserve Bank of India. This has helped oil firms get a better price and generate adequate liquidity to fund oil imports despite mounting revenue losses.