Business Daily from THE HINDU group of publications
Friday, Jan 04, 2008
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Friday, Jan 04, 2008 ePaper | Mobile/PDA Version |
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Industry & Economy
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Petroleum Corporate - Corporate Bonds Soaring crude: IOC may sell Rs 2,000-cr bonds Our Bureau New Delhi, Jan. 3 The soaring crude prices may compel Indian Oil Corporation (IOC) to sell oil bonds to offset revenue losses incurred due to retailing fuel below the cost price. IOC may have to sell bonds worth Rs 2,000 crore this month, IOC’s Director-Finance, Mr S.V. Narasimhan, said. Mr Narasimhan said, “We are optimising inventory, reducing working capital and maximising throughput to mitigate the impact of rising crude oil prices.” “The company was losing about Rs 170 crore per day on sale of petrol, diesel, LPG and kerosene. However, the net revenue losses are about Rs 41 crore per day taking into account oil bonds and upstream sharing,” he said. “Crude at $100 will not affect the retail sales because product prices have not increased as fast as crude prices. However, this is going to eat into our refinery margins,” he added. The company’s borrowings, which stood Rs 27,000 crore on September 30, 2007, have risen to over Rs 29,000 crore as it borrowed money to meet the working capital requirement. The upstream major ONGC expects the subsidy burden shared by it to be over Rs 20,000 crore in the current fiscal year to March 31, 2008, if the current crude prices remain. “But the net impact of high crude oil prices would offset the subsidy burden and improve the company’s net margin,” Mr R.S. Sharma, ONGC Chief Managing Director said. High crude oil prices help exploration companies like ONGC, as it can sell oil to refineries at a higher cost. More Stories on : Petroleum | Corporate Bonds
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