Economy

Dollar needs: Oil Ministry says no to RBI plan to buy from single bank

Our Bureau New Delhi | Updated on July 17, 2012 Published on July 17, 2012

rupee

The Petroleum Ministry has turned down the Reserve Bank of India (RBI) proposal asking public sector oil marketing companies to buy 50 per cent of their dollar requirement from any one public sector bank.

The Petroleum Secretary, Mr G.C. Chaturvedi, said the RBI has agreed that these companies – Indian Oil Corporation, Hindustan Petroleum Corporation, and Bharat Petroleum Corporation -- continue to buy dollars according to the existing mechanism.

Currently, the oil marketing companies ask for quotes from several banks to buy dollars.

“Oil companies save 2-3 paise a dollar under the competitive route,” Mr Chaturvedi told newspersons.

On June 22, Mr Chaturvedi had said that that the Ministry had received a communication from the RBI asking oil companies to buy 50 per cent of their dollar demand from State Bank of India.

This move was taken to help check the perception of excess dollar demand in the country amid a sharp decline in rupee value.

>siddhartha.s@thehindu.co.in

Published on July 17, 2012
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