The Hindu : Business : Rs. 21,000 cr oil bonds urged

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Tuesday, Dec 22, 2009
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Rs. 21,000 cr oil bonds urged

Special Correspondent

The Finance Ministry had not issued any bonds for the three quarters

NEW DELHI: Petroleum and Natural Gas Minister Murli Deora on Monday urged Prime Minister Manmohan Singh to intervene and get issued oil bonds worth Rs.20,872 crore to the three state-run oil marketing companies to make up for the losses they had incurred on fuel sales. Though the government had earlier this year explicitly decided to compensate Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation for the losses they incurred on selling domestic LPG and kerosene through PDS by way of oil bonds, the Finance Ministry had not issued any bonds for the three quarters.

The three companies lost Rs.11,853 crore in revenues on not being allowed to raise LPG and kerosene prices in line with the cost during April-September. An additional revenue loss of Rs.9,019 crore revenue was estimated for the third quarter ending December 31, 2009.

Mr. Deora had on two occasions written to Finance Minister Pranab Mukherjee for issuing oil bonds but the Ministry has failed to allocate any amount towards this in the supplementary demands of grant (extra spending). “We have not got any bonds in the last three quarters. It is not possible to continue like this,” Mr. Deora said.

Revenue loss

The government had decided to make good all of the revenues lost on sale of domestic LPG and kerosene through the issue of oil bonds, while the same on petrol and diesel was to be met by upstream firms like OIL and Oil and Natural Gas Corporation.

The three firms now lose Rs.3.49 a litre on petrol, Rs.2.38 a litre on diesel, Rs.18.13 a litre on kerosene and Rs.250.67 per LPG cylinder, according to Mr. Deora.

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