Govt issues oil bonds of Rs 21,942 crore

In a bid to compensate oil marketing companies (OMCs) from heavy loss during the current fiscal by selling sensitive petroleum products below the prices, the Government of India on Wednesday issued oil bonds amounting Rs.21,942-crore to three OMCs: Indian oil corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL).

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The IOCL has been benefited from bonds worth Rs.11,943.93-crore, BPCL from Rs.5,316.71-crore and HPCL from Rs.4,681.36-crore.

These special bonds carry 6.90% coupon rates with the maturity period of 17 years by 2026. These special bonds will be transferable and eligible for market ready forward transactions (Repo), said Ministry of Finance while issuing the second round of oil coupon special bonds.

In this financial year, government had compensated the OMCs by issuing special bonds in the form of oil coupons of worth Rs.44,000-crore in two rounds.

These bonds have been issued to OMCs to reimburse their heavy losses when the OMCs had sold the petrol, diesel and kerosene below the market prices despite sky rocketing crude oil price that was above 130$ per barrel.

Earlier, the planning commission had estimated the loss nearby Rs.1,50,000-crore viewing the soaring prices of crude oils but with a sharp fall in prices, the loss has been recalculated to Rs.75,000-crore.

Last month, the government has slashed the prices of petrol by Rs.5 and diesel by Rs.2 to bring parity with international crude oil prices that is hovering around $40 mark.