Petroleum Minister Murli Deora on Tuesday asked the Finance Ministry to issue oil bonds to cover 57.1 per cent of the total Rs 77,000 crore losses suffered by oil companies last fiscal, as they continue to take a hit from the spike in global crude prices.
Deora met Finance Minister P Chidambaram here, but has not been able to secure an assurance regarding issuance of oil bonds to compensate companies, whose under-recoveries have been ballooning on account of sale of fuel below cost price.
Asked whether he discussed the need for an upward revision in fuel prices with the Finance Minister, the Petroleum Minister said there was no discussion on the subject, while adding that a decision on price increase could be taken only by the Cabinet.
Last week, Petroleum Secretary M S Srinivasan had said: "Oil prices are very high. Soft options are running out. Hard decisions need to be taken."
Crude oil prices have eased from a record high of USD 126.20 a barrel, but are still trading at USD 123-level. India imports 73 per cent of its crude oil needs and the cost of imports would spiral as crude inches higher, while rupee is trading at a 13-month low.
Under-recovery (of oil companies) is expected to be at USD 42-billion by the end of this fiscal, Srinivasan had said, adding that it was "not sustainable in the long run."