Finance ministry defers oil bonds issue to psu OMCs in 3Q
14 Dec 2009
According to reports the ministry of finance is in favour of scrapping of the current practice of issuing oil bonds to oil-marketing companies (OMCs).
The ministry has deferred issuing oil bonds to PSU OMCs in the third quarter even as they are likely to post losses in addition to the losses of Rs11,500 crore they have accumulated in the first half.
According to R S Sharma, chairman of ONGC there was no case to subsidise petrol. He said ONGC has suggested windfall tax rate at various crude levels and to fix retail fuel rates according to crude prices.
According to reports, the tax, also suggested as 'price equalisation discount' and 'windfall tax' would partially make up losses suffered by state-run oil marketers for selling fuel at government-capped price. ONGC and Oil India Ltd (OIL) have, however, have suggested different thresholds for the special tax or discount to kick in.
Sharma said it was wrong to keep kerosene and liquefied petroleum gas (LPG) completely insulated from crude. He added that though mechanism of subsidy burden, remained unchanged for the third quarter there was a need to abolish the current ad hoc system of subsidy sharing. He said he expected the Kirit Parikh committee would take a dynamic view on the issue.
The report of the Kirit Parikh committee set up by the UPA government to suggest a sustainable fuel pricing model will be out by January-end.
Regarding the company's future plans, Sharma said ONGC would go for an initial public offer (IPO) of ONGC petro-additions (OPaL), a special vehicle promoted by ONGC and Gujarat State Petroleum Corporation (GSPC) in two years. However he denied the company was considering selling stakes in Petronet and GAIL for now.
