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Petroleum minister Murli Deora is seeking bonds worth Rs 30,000 crore (Rs 300 billion) for state-run fuel retailers to make up for the losses they incurred on selling domestic LPG and kerosene this fiscal.
"(Deora) will meet finance minister (Pranab Mukherjee) this evening on the issue," petroleum secretary R S Pandey told reporters in New Delhi.
Though the government had earlier this fiscal explicitly decided to compensate Indian Oil, Hindustan Petroleum and Bharat Petroleum for the losses they incur on selling domestic LPG and kerosene through PDS by way of oil bonds, the finance ministry has not issued any bonds for the three quarters.
The three firms lost Rs 11,853 crore (Rs 118.53 billion) in revenues on not being allowed to raise LPG and kerosene prices in line with the cost during April-September.
An additional Rs 9,019 crore (Rs 90.19 billion) revenue loss was incurred in third quarter ending December 31.
Deora had last month met Prime Minister Manmohan Singh on the issue and the same may figure again during a review meeting Singh will take on the oil sector tomorrow evening.
"We are hopeful that compensation will be issued . . . whether it is in form of oil bonds or cash, it has to be decided," Pandey said.
For the first nine months, oil bonds worth Rs 29,872 crore (Rs 298.72 billion) have been sought, he said adding for the full fiscal about Rs 30,000 crore (Rs 300 billion) is likely to be the revenue loss on two fuel.
Deora had on at least two occasions written to Mukherjee and on December 21 met prime minister for issuance of oil bonds but the finance ministry did not provide any sum towards this in supplementary demands of grant (extra spending) that it got approved from Parliament last month.
"We have not got any bonds this fiscal," Pandey said. In absence of bonds, BPCL and HPCL reported net losses in Q2 while IOC barely making a profit. Pandey said the government had decided to make good all of the revenue lost on sale of LPG and kerosene through issue of oil bonds, while the same on petrol and diesel was to be met by upstream firms like Oil and Natural Gas Corporation.
The three firms currently lose Rs 3.06 a litre on petrol, Rs 1.56 per litre on diesel, Rs 17.23 a litre on kerosene and Rs 299.01 per LPG cylinder, he said.
They are projected to lose about Rs 44,300 crore (Rs 443 billion) in revenues in full year. Officials said under-recoveries or revenue loss on petrol and diesel amounting to Rs 4,003 crore (Rs 40.03 billion) had been compensated by ONGC, Oil India Ltd and GAIL India Ltd through price discounts on crude oil and products sold to retailers.
The government, which had last fiscal issued oil bonds worth Rs 71,292 crore (Rs 712.92 billion), has not issued any bonds to the three PSUs for revenue losses during the current fiscal.
HPCL reported a net loss of Rs 136.68 crore (Rs 1.36 billion) in the second quarter, while BPCL posted a net loss of Rs 158.77 crore (Rs 1.58 billion). IOC was slightly better off, registering a net profit of Rs 284.36 crore (Rs 2.84 billion).