Government bonds needed to boost state-owned oil firms’ bottom line

India’s Ministry of Petroleum asked the Finance Ministry to permit it to give additional bonds worth Rs100 billion (US$2.02 billion) to the country’s three public sector oil marketing companies. The bonds, the ministry said, would help Indian Oil Corp. (IOC), Bharat Petroleum Corp. Ltd. (BPCL) and Hindustan Petroleum Corp. Ltd. (HPCL) end the last fiscal year with a profit. The bottom line of all three companies were in the red for the nine months ending December 31, 2008 on account of subsidized sales of petrol, diesel fuel, kerosene and liquefied petroleum gas, when prices of the Indian basket of crude touched a peak of US$142 a barrel in July last year. Losses from the sale of subsidized petroleum products are jointly shared with upstream companies like Oil and Natural Gas Corp. (ONGC) and GAIL (India) Ltd. through discounts and the government through bonds. (April 28, 2009)