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Friday, January 30, 2009

Oil cos may need Rs 11000 cr more in bonds by March

The government may have to issue additional oil bonds worth Rs 11,000 crore to state-run oil marketing companies - Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) - in the fourth quarter of 2008-09. The bonds will compensate oil companies for keeping retail prices of petrol, diesel, kerosene and cooking gas below the cost during the year. The combined loss (under-recovery) of the three companies is estimated at Rs 101,445 crore for 2008-09.

“Against an estimated under-recovery of Rs 101,445 crore for the entire fiscal, the government has already agreed to issue oil bonds worth Rs 60,967 crore. Public sector upstream oil companies such as Oil & Natural Gas Corp and Oil India have already contributed Rs 32,000 crore in the current fiscal. Balance under-recoveries will be met through additional oil bonds,” an oil ministry official said.

At the end of the fiscal, the three oil companies - IOC, BPCL and HPCL - will not take any hit on their balance sheet. “A loss-making company can’t share the subsidy burden. They have already reported a loss of over 14,000 crore in the first half of 2008-09. Even upstream companies have done their bit by contributing Rs 32,000 crore. Balance under-recoveries would be met through oil bonds,” he said.

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Economic Event Calendar

GMT+5:30 Event Vol. Actual Consensus Previous
Wednesday, Jun 25
19:30 New Home Sales Change (MoM) 2 -13.7% 9.6% Revised from 10.9%
19:30 New Home Sales (MoM) 1 0.623M 0.690M 0.722M Revised from 0.743M
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22:30 5-Year Note Auction 1 3.879% 4.071%
Thursday, Jun 26
14:00 BoE's Breeden speech 2
15:15 BoE's Greene speech 2
16:30 BoE's Governor Bailey speech 3
18:00 Chicago Fed National Activity Index 1 -0.25
18:00 Initial Jobless Claims 2 245K 245K
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