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Govt issues Special Bonds to bail out oil marketing firms

Written by: Staff

New Delhi, Mar 24 (UNI) Government today announced issue of special bonds to three oil marketing companies comprising IOC, BPCL and HPCL, worth Rs 5750 crore to compensate them for under-recoveries in their domestic LPG and Kerosene operations during 2005-06.

''The special bonds were issued at par to Indian Oil Corporation Ltd (IOCL) for Rs 3,542.95 crore, Bharat Petroleum Corporation Ltd (BPCL) for Rs.1062.31 crore and Hindustan Petroleum Corporation Ltd (HPCL) for Rs 1144.74 crore,'' a Finance Ministry statement said here.

The second tranche of Spercial Bonds bear different coupon rate and the maturity dates. These are : Oil Marketing Companies' Government of India Special Bonds, 2009 for Rs 2,000 crore (nominal), 7.44 per cent Oil Marketing Companies' Government of India Special Bonds, 2012 for Rs 2,000 crore (nominal) and 7.59 per cent Oil Marketing Companies' Government of India Special Bonds, 2015 for Rs 1750 crore (nominal).

The investment in the special bonds will not be reckoned as an eligible investment for purpose of Statutory Liquidity Ratio (SLR).

The special bonds will be transferable and eligible for market ready forward transactions (Repo). The bonds, however, will not be an eligible underlying security for ready forward transactions (Repo/Reverse Repo) with the Reserve Bank of India.

Earlier in the day, Indian Oil Corporation (IOC) claimed that it is set to lose Rs 5,000 crors this year.

IOC said it was currently losing Rs 2.40 per litre on petrol and Rs 4.40 per litre on diesel as domestic fuel tariffs have not moved in tandem with hike in global prices.

Speaking on the sidelines of the India Oil and Gas Conference, IOC director S V Narasimhan, said the company lost Rs 1,700 crore in revenue on sale of petrol, diesel, LPG and kerosene for the first three months of this year alone.

For the full year of 2005, the under-realisation is pegged at around Rs 23,000 crore.

After taking into account the discount given by oil producers, ONGC and GAIL and oil bonds issued by the government, the net revenue loss for IOC in fiscal 2006 would be about Rs 5,000 crore.

IOC was selling LPG at a loss of Rs 243 per cylinder and kerosene at a loss of Rs 13.10 per litre.


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