The government yesterday issued bonds worth Rs 21,942 crore to the oil marketing companies to compensate for the losses incurred by them. IOC got about 54% of the total bonds while BPCL was issued nearly a fourth and HPCL the rest. These bonds have a coupon of 6.9% and mature in 2026. Since the oil marketing companies have little leeway in fixing prices of petroleum products resulting in losses, especially on the sale of kerosene and LPG.
To help them tide over these losses, the government compensates them partly through the issuance of these bonds, transfers from upstream companies like ONGC and leaving them to bear some of the losses themselves. These bonds will improve the cash flow position of the companies as they can sell them in the secondary market. In the past, when the companies have problems encashing them, the RBI has provided a temporary liquidity window to them to sell these bonds. The bonds will reflect in the fourth quarter results.
IOC Rs 11943.93 crore
HPCL Rs 4681.36 crore
BPCL Rs 5316.71 crore