The Hindu Business Line : To pay back balance to oil cos — Petroleum Ministry seeks second tranche of oil bonds

THE Petroleum Ministry has asked the Finance Ministry to issue Special Government Bonds amounting to Rs 5,762.85 crore to oil companies in order to liquidate the balance payable to these firms from the Oil Pool Account.

Consequent to the dismantling of the administered price mechanism (APM) from April 1, 2002, the Oil Pool Account was also wound up from the same date.

"With a view to partially liquidating the outstanding of the oil companies against the Oil Pool Account, the Government had issued oil bonds amounting to Rs 9,000 crore on March 30, 2002," a Petroleum Ministry official said.

It was also decided then that the balance payable to these companies from the Oil Pool Account as on April 1, 2002 would be liquidated by issuance of Special Government Bonds after completion of special audit of these accounts, as directed by the Comptroller and Auditor General of India (CAG).

"On completion of the special audit, we have requested the Finance Ministry to issue bonds amounting to Rs 5,762.85 crore to oil companies," the official told Business Line.

As for subsidised sale of petroleum products and the losses that oil companies were incurring due to it, the official clarified that public sector oil marketing companies were currently getting subsidy from the Government on kerosene supplied through the public distribution system (PDS) and on domestic LPG cylinders.

There is no subsidy on petrol and diesel.

However, with international crude prices on the rise, the oil marketing companies have ended up with under-recoveries on PDS kerosene and domestic LPG during the last three years.

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