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Oil bonds sought to compensate refiners

business Updated: Jul 04, 2007 18:28 IST

PTI
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The Petroleum Ministry is seeking Rs 19,000 crore worth of oil bonds to partly compensate refiners who are selling fuel below the cost.

The total under-recovery on sale of petrol, diesel, domestic LPG and kerosene is expected to be above Rs 55,000 crore this fiscal, to mitigate which the ministry is seeking issuance of the bonds.

Petroleum Minister Murli Deora will meet Finance Minister P Chidambaram on July 13 to make a case for issue of oil bonds, Petroleum Secretary MS Srinivasan said on Wednesday.

Public sector oil firms are losing about Rs 170 crore per day on sale of petrol, diesel, domestic LPG and kerosene as the government has not allowed them to raise fuel prices in step with rise in cost.

Indian basket of crude oil has risen more than 12 per cent since February when petrol and diesel were cut by Rs 2 a litre and Re one per litre respectively.

State-run Indian Oil, Bharat Petroleum and Hindustan Petroleum are losing Rs 4.97 a litre on petrol and Rs 4.45 per litre on diesel. The loss on sale of kerosene through the public distribution system is Rs 14.63 per litre and on LPG is Rs 189.14 per cylinder.