Public sector Indian Oil Corporation will sell bonds worth Rs 2,000 crore (Rs 20 billion) this month to tide over a financial crunch due to non-revision of fuel prices, Sarthak Behuria, chairman, IOC said today.
"The company was losing Rs 165 crore (Rs 1.65 billion) per day on sale of petrol, diesel, LPG and kerosene and was facing a shortfall in working capital fund," said Behuria in New Delhi.
Crude oil prices crossed 100 dollar a barrel mark yesterday evening in New York, triggering a possible government response to reduce the under-recoveries by public sector oil firms. Indian Oil, Bharat Petroleum and Hindustan Petroleum are projected to lose Rs 69,753 crore (Rs 697.53 billion) on fuel sale, as the government has not allowed them to raise prices in line with the price of imported crude.
S V Narasimhan, IOC director (finance) said: "We are optimising inventory, reducing working capital and maximising throughput to mitigate the impact of rising crude oil prices." The company's borrowings, which stood Rs 27,000 crore (Rs 270 billion) on September 30, 2007, have risen to over Rs 29,000 crore (Rs 290 billion) as it borrowed money to meet the working capital requirement in the absence of remunerative fuel prices.
IOC was selling petrol at a loss of Rs 9.20 a litre, diesel at Rs 10.9 per litre, LPG at Rs 332 per cylinder and kerosene at Rs 19.9 per litre.