The Hindu Business Line : Oil marketing cos may get bonds worth Rs 15,400 cr

The Petroleum Ministry has recommended giving oil companies either fixed-rate bonds with interest similar to Government securities, or zero-coupon three-year bonds at a discount.

New Delhi , Nov. 8

OIL marketing companies such as Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum are likely to be issued bonds worth about Rs 15,400 crore by the Government for partly offsetting their under recoveries for selling fuel below cost of production.

The bonds are expected in the second supplementary demands for grant in December.

At the sidelines of a session on `Energy - Alternate solutions for India's needs' here today, the Petroleum Secretary, Mr S.C. Tripathi, told presspersons that, "We have submitted our proposal to the Finance Ministry. It is now up to the Finance Ministry to take a decision on the issue in consultation with the Reserve Bank of India on the duration and other details of the bonds".

On September 6 the Government had announced the issue of bonds. The Petroleum Ministry has recommended giving oil companies either fixed-rate bonds with interest similar to Government securities, or zero-coupon three-year bonds at a discount, Mr Tripathi said. The difference between the discount and the par value is the return to the investor, he added.

Rangarajan panel: The Secretary said the first meeting of the recently constituted Dr C. Rangarajan inter-ministerial committee would be held on Wednesday. The committee would formulate a long-term policy on pricing and taxation of petroleum products.

The committee has been asked to submit its report within six months.

It has been asked to suggest a comprehensive mechanism for pricing of sensitive petroleum products after taking into consideration the interest of all the stakeholders, including the Government, oil companies and the public.

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