New Delhi: The Finance Ministry on 13 May turned down the demand of Petroleum Ministry to issue oil bonds worth Rs44,000 crore to partially offset the Rs77,000-crore losses suffered by oil marketing companies during 2007-08 due to rise in global crude prices.
“We have asked 57.1% oil bonds. And they (the Finance Ministry) are not ready for it. So we have requested him (Finance Minister P Chidambaram) to issue as much as possible,” Petroleum Minister Murli Deora told reporters after meeting the Finance Minister.
When asked about the deliberations at the meeting, Chidambaram declined to make any comment on the issue.
To a question on increasing domestic fuel prices, Deora said there was no discussion on it and that it was a policy decision that could be decided only by the Cabinet.
Petroleum Additional Secretary S Sundaresan said, “We had a very satisfactory discussion. The Petroleum Minister has explained the problems faced by the oil marketing companies and we will take a decision very soon on the quantum of oil bonds.”
According to Petroleum Ministry, oil marketing companies suffered under-recoveries of Rs77,000 crore in 2007-08.
The Petroleum Additional Secretary said it was not discussed in the meeting whether the bonds would be taken as mandatory requirement for banks to park their funds in government securities, known as Statutory Liquidity Ratio.
When asked, Deora said there was no programme to meet Prime Minister Manmohan Singh on the oil bond issue.
Meanwhile, sources said the Finance Ministry has not agreed to “calculation of under-recoveries” made by the Petroleum Ministry and has asked it to rework the losses.