Financial Daily from THE HINDU group of publications
Tuesday, Apr 02, 2002
Industry & Economy - Petroleum
To cover pool account deficit -- Govt issues Rs 9,000-cr bonds to oil majors
NEW DELHI, April 1
THE Government has issued bonds aggregating Rs 9,000 crore to the state-owned oil companies to liquidate a substantial part of their dues in the oil pool account.
The issue of the special bonds also coincides with the freeing of the domestic oil and gas sector from controls. The prices of petro-products would be governed by import parity and retail pricing of products would be based on import cost plus freight and local taxes, according to the Petroleum Minister, Mr Ram Naik.
The issuance of oil bonds by the Government is aimed at compensating the oil companies for part of their outstandings estimated to be over Rs 13,000 crore through issuance of 6.96 per cent Oil Companies' Government of India Special Bonds 2009. These bonds would have a maturity of seven years.
Indian Oil Corporation has received the highest allocation of these special bonds at Rs 5,276 crore, followed by the Hindustan Petroleum Corporation Ltd (HPCL), which received bonds worth Rs 1,481 crore, Bharat Petroleum Corporation Ltd (BPCL) Rs 1,018 crore, and ONGC Rs 961 crore.
For the other oil companies, the Government has allocated Rs 107 crore for Oil India Ltd, Rs 56 crore for Bongaigaon Refinery and Petrochemicals (BRPL) while Numaligarh Refinery Ltd (NRL) received Rs 46 crore.
Kochi Refinery Ltd (KRL) has been issued bonds aggregating Rs 37 crore, Chennai Petroleum Corporation Ltd Rs 12 crore and Gas Authority of India Ltd (GAIL) Rs 6 crore.
According to the Government, the present payment is being made on a provisional basis in lieu of part of the estimated outstanding claims of the oil companies on the Oil Coordination Committee under the erstwhile administered pricing mechanism (APM) as on March 31, 2002.
The claims are subject to audit by the Comptroller and Auditor-General of India and final acceptance.
The balance amount of the oil pool account deficit will be paid to the oil companies after the accounts are certified by the CAG, according to the Government.
With the deregulation of the sector with effect from Monday, the Oil Coordination Committee (OCC) has also been wound up. In its place, the Government has set up a new cell called the Petroleum Planning and Analysis Cell under the Petroleum Ministry. This will assist the Ministry in maintaining up-to-date data and statistics on the oil sector.
According to Mr Naik, this will facilitate not only the smooth switchover but also help the Government play a role of a watchdog in the oil sector and ensure healthy competition. "At the same time, the Government will ensure that the oil companies maintain uninterrupted supplies of petroleum products throughout the country," he said in a statement.
Domestic prices of petroleum products would now be a reflection of increase or decrease in global prices, Mr Naik said.
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