FE?s story on the liquidity crunch being faced by the oil marketing companies saw the petroleum ministry getting into action on Thursday and as a face saving exercise, petroleum secretary R S Pandey was quick to clarify that ?there is no liquidity problem.?
What seems surprising is that this statement comes at a time when all the three chiefs of the oil marketing companies have in their respective letters told the petroleum ministry of the ?tremendous liquidity pressure? being faced by them.
Also the story on BPCL likely to default on its ECB loan was what the company has informed the ministry in a recent letter. Chairman of BPCL, Ashok Sinha has in his September 25 letter mentioned very clearly that the corporation was likely to breach the covenants set in the ECB loan agreement which would ?deemed to be a default?. FE merely reported the facts stated by BPCL in its letter to the petroleum ministry.
So either Pandey is appearing to be ignorant or the letters written by the three OMCs to the ministry need to be discounted.
On his part, Pandey clarified to reporters that BPCL was not facing any liquidity problem and will not default on any of its financial obligations.
?BPCL and in fact all the public sector oil companies are not facing any liquidity problem,? Pandey said adding that BPCL had informed him that the out of the current level of ECB of $300 million, around $100 million is due for repayment in October 2009 and the balance in March 2012.
Pandey said that BPCL has adequate borrowing limits/credit lines for meeting all its fund requirements. ?I categorically state that there is no liquidity problem with oil companies. It is not true that oil companies are facing problems getting loans from banks. The only issue is the cost of borrowing (which has gone up),? Pandey said.