As of date, dues to the Oil and Natural Gas Corporation (ONGC) are the highest at Rs 2,083.40 crore, followed by Mangalore Refinery and Petrochemicals (Rs 500 crore), Indian Oil Corporation (Rs 250 crore), Oil India (Rs 142.39 crore), Hindustan Petroleum Corporation (Rs 101 crore) and Bharat Petroleum Corporation (Rs 11 crore).

The recent redemption of Rs 398.09 crore comprises Rs 227 crore to IOC, Rs 110 crore to MRPL, Rs 35 crore to HPCL and Rs 26 crore to BPCL. Strangely enough, a mere Rs 0.07 crore and Rs 0.02 crore have been redeemed for ONGC and Oil India. "In fact, little has been done for ONGC whose dues continue to be the highest with the government adopting a piecemeal approach to the redemption process," sources said. ONGC officials were, however, unavailable forcomment on the issue.

The next round of bonds redemption, scheduled to take place during the next three months, will see the dues of HPCL and BPCL being wiped out completely. This is expected to be repeated in the case of IOC and MRPL following which the government will kick off the process of squaring the dues with ONGC and Oil India.

The bonds were issued to the oil companies in lieu of the outstandings which came about as a result of the pool crisis of 1997. This was the time the country was under tremendous pressure because the situation was getting out of hand with IOC, the sole canalising agency for crude, bearing the brunt of the burden.

As in September 1997, the dues to all the oil companies were at a staggering Rs 18,200 crore of which the amount owed to IOC alone was close to Rs 10,000 crore. In March 1998, the government issued bonds worth Rs 12,984 crore (the net outstandings as on that date after settling a portion of the dues between September and March) to the oil majors based on therecommendations of the Arjun Sengupta committee which was set up to suggest a suitable solution to the oil pool crisis.

The individual breakup of the outstandings of Rs 12,984 crore as indicated by the bonds were: IOC Rs 6,478 crore; ONGC Rs 3,122 crore; BPCL Rs 760 crore; HPCL Rs 994 crore; Madras Refineries (MRL) Rs 164 crore; MRPL Rs 1,242 crore and Oil India Rs 224 crore.

In December 1998, the government made its first redemption of bonds to the tune of Rs 6,382 crore. MRL's dues of Rs 164 crore were settled while the other payments comprised Rs 4,079 crore to IOC, Rs 709 crore to ONGC, Rs 494 crore to BPCL, Rs 568 crore to HPCL, Rs 311 crore to MRPL and Rs 57 crore to Oil India.

The early redemption was possible thanks to the low prices of crude the world over which was the best piece of news to the Oil Coordination Committee. In fact, this led a section of experts to believe that the schedule of removing administered pricing mechanism (APM) could be advanced to the year 2000 instead of 2002 asoutlined in the Nirmal Singh committee report. The group, it may be recalled, was set up to suggest an appropriate time frame for introducing market-determined pricing mechanism (MDPM) which would do away with the need for an oil pool account.