State-owned OMCs to get oil bonds

India’s state-owned oil marketing companies (OMCs) will receive subsidy payments amounting to Rs14,150 crores (US$3.08 billion) from the government in the form of oil bonds in three tranches beginning October. The bonds, which will carry a coupon rate of 7.5-8%, represent half of the total payments due to the OMCs. The government has decided to issue oil bonds worth Rs28,300 crores (US$6.15 billion) to OMCs to partly compensate them for the losses on retail sales of petrol and diesel fuel. IOC and its subsidiary, IBP, are expected to get nearly 50% of the bonds, while BPCL and HPCL will equally share the rest. (August 26, 2006)