Oil cos to get Rs 9,080-cr bonds for Q3 losses

Written by Energy Bureau | New Delhi, Jan 28 | Updated: Jan 29 2008, 04:28am hrs
The government will issue oil bonds worth Rs 9,080-crore to state-run fuel marketers IOC, HPCL and BPCL as part compensation for selling fuel below cost during the third quarter ended December 31, 2007.

While IOC is expected to get Rs 5,100 crore worth of oil bonds, HPCL will receive bonds worth Rs 1,900 crore followed by BPCL at Rs 2,080 crore, official sources said.

This is in line with the governments policy to compensate the public sector oil marketing companies by issuing special oil bonds, corresponding to 42.7% of the total losses on sale of the four fuels. Of the balance under-realisations, one-third of the losses get compensated by way of discounts on crude oil from companies such as ONGC and the remaining losses are borne by the fuel retailers.

The government had last week issued bonds worth Rs 11,256.92 crore to three PSU oil marketing companies to compensate them for losses on selling petrol, diesel, domestic LPG and PDS kerosene in April-September 2007 period.

For April-September losses, IOC got Rs 6,362.25 crore of oil bonds, BPCL Rs 2,539.13 crore and HPCL Rs 2,355.54 crore worth of bonds carrying coupon rate of 7.95% maturing in 2025. For the October-December quarter, the retailers got Rs 7,083 crore from upstream firms and the remaining of the Rs 21,264.6-crore loss on sale of petrol, diesel, LPG and kerosene was borne by IOC, BPCL and HPCL.

The total loss on sale of the four fuels during April-December has been pegged at Rs 47,628 crore, of which the government compensated Rs 20,336.92 crore through bonds. For the full fiscal, the aggregate loss of IOC, BPCL and HPCL on fuel sales is being pegged at Rs 71,808 crore.