'No petrol price hike; OMCs to get oil bonds'

New Delhi, Oct 11: In a move aimed at avoiding a hike in the retail prices of petrol and diesel, the Cabinet today decided to issue oil bonds worth over Rs 23,000 crore to Oil Marketing Companies (OMCs) to cover 42.7 per cent of the under-recoveries arising from the rising crude prices in the international market.

The upstream companies have been asked to share about one-third of the total under-recoveries of the OMCs, Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters.

Further, the government would extend the existing subsidy for three more years from April 1, 2007, he said.

The decisions would enable continuation of subsidies on PDS kerosene and domestic LPG and sharing the burden of OMCs' under- recoveries on account of sale of sensitive petroleum products.

UNI