THE government may issue oil bonds worth Rs 12,000 crore to public sector oil marketing companies (OMCs) by mid-October to set off part of the losses incurred on the sale of retail fuel.
Oilcos such as IOC, BPCL and HPCL have been incurring huge losses on the sale of fuel as retail prices have remained unchanged even though global crude prices have breached the $80-a-barrel mark.
Speaking on the sidelines of a seminar, petroleum secretary MS Srinivasan said the government is assessing under-recovery of OMCs and would issue oil bonds by October 15. “We are expecting Rs 24,000 crore worth of oil bonds this fiscal. In the first tranche, we are expecting Rs 12,000 crore of oil bonds,” he said.
Even as the prices of petrol, diesel, kerosene and domestic LPG skyrocketed, public sector OMCs were prevented from raising fuel prices with the assurance that they would be compensated partially through oil bonds. Mr Srinivasan expressed concern over rising global crude prices, which are hovering at around $84 per barrel. “We are keeping a close watch and constantly monitoring the situation,” he said. India is dependent on imported crude, which meets 70% of the country’s total requirement. The government, however, ruled out any immediate price hike. OMCs are currently losing Rs 3.35 per litre on petrol, Rs 5.75 per litre on petrol, Rs 14.19 per litre on kerosene and Rs 185 per cylinder on domestic LPG. The country’s largest retailer IndianOil is losing about Rs 81 crore a day from selling fuels below cost. Petrol in Delhi is currently priced at Rs 43.52 per litre, diesel at Rs 30.48 per litre, kerosene at Rs 9.09 per litre and LPG at Rs 294.75 a cylinder.
Companies like IOC, BPCL & HPCL have been incurring huge losses on sale of fuel as retail prices have remained unchanged
Petroleum secretary said govt is assessing under-recovery of OMCs