Oil bonds not likely before November

Finance Minister P Chidambaram on Thursday indicated that the government would not issue oil bonds worth over Rs 10,000-12,000 crore (Rs 100 to 120 billion) to petroleum companies before November, as the move required Parliamentary approval.

"We are working out (oil bonds). They will be issued after getting the approval of Parliament," Chidambaram said.

Issue of oil bonds would require appropriation of a required amount from the consolidated fund of India, which meant seeking approval of the Parliament.

Govt plans oil bonds to meet rising payments

Withdrawal of such amounts could therefore only be through supplementary demands for grants and the next winter session of Parliament is expected to start only after middle of November, sources said.

The government announced on September 6 that bonds are likely to be issued to oil retailers -- Indian Oil Corporation, Bharat Petroleum, Hindustan Petroleum and IBP to compensate them for not raising domestic cooking gas and kerosene prices in line with the rise in global crude prices.

Of the Rs 19,634 crore (Rs 196.34 billion) revenue loss on LPG and kerosene, Rs 3,600 crore (Rs 36 billion) would come from direct budgetary subsidy. For the remaining amount, oil bonds were expected to be issued.