Govt to issue Rs 5,000-cr oil bonds
The bonds will offset losses suffered by public sector oil marketing companies due to a cap on retail fuel prices.india Updated: Oct 13, 2006 20:06 IST
The Government will issue the first instalment of Rs 5,000 crore oil bonds to public sector oil marketing companies on Monday.
The bonds are expected to offset losses suffered by them due to a cap on retail fuel prices.
The Finance Ministry has decided against giving statutory liquidity ratio (SLR) status to the oil bonds, which would have enabled demand from banks that must buy SLR securities as a part of their deposits.
However, pension funds would be allowed to invest in the new bonds, a senior petroleum ministry official said.
The second instalment of Rs 5,000 crore could be expected in November and the remainingamount of Rs 4,150 crore, the last tranche, could be given in December.
The official said the Rs 14,150-crore bonds would cover revenue losses suffered by oil companies on oil product subsidies in the first half of the current financial year that began in April.