Ministry seeks oil bonds worth Rs50,600 crore for January-June 2008

23 Jul 2008

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Mumbai: The petroleum ministry has demanded issue of oil bonds worth over Rs50,600 crore to state-run oil companies as part compensation for discounted sale of fuel during January-June 2008.

Of this, Rs14,956.17 crore of bonds will go to IOC, BPCL and HPCL for the last quarter of 2007-08 (January-March) while Rs35,672.70 crore will be allocated for the first quarter of fiscal 2008-09 (April-June), official sources said.

State-run oil companies are expected to have lost over Rs70,579 crore in revenues on the sale of petrol, diesel, domestic LPG and kerosene for fiscal 2007-08.

For the April-June quarter, the revenue loss has been estimated at Rs51,922.70 crore.

Fifty per cent of the loss is to be met through the issue of oil bonds while upstream oil companies take a similar hit on crude prices recovered from fuel refining and distributing companies.

The government issued bonds worth Rs20,333.33 crore during April-December 2007 and the petroleum ministry has now sought Rs14,956.17 crore for the January-March period.

IOC, Hindustan Petroleum and Bharat Petroleum currently incur a loss of Rs16.70 per litre on the sale of petrol, Rs27.61 a litre on diesel, Rs38.09 per litre on kerosene and Rs338.53 per 14.2-kg cylinder on the sale of domestic LPG.

The subsidy burden on upstream oil companies - ONGC and OIL India - will be limited to Rs45,000 crore for the full financial year, sources said.

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