IOC eyes oil bonds to sustain margins

Indian Oil Chairman Sarthak Behuria on Tuesday said the company stood to earn profits of about Rs 4,000 crore this fiscal if the government approved the issue of bonds worth Rs 11,500 crore by this March.

During April-December 2005-06, Indian Oil earned a profit of Rs 889 crore, as against Rs 3,998 crore during the same period last year.

"The proceeds from the bonds, subsidy sharing and discounts together will help IOC to retain its profit position at last year's level," Behuria said on the sidelines of the Asian Gas Summit today.

He added that with oil bonds worth Rs 6,000 crore, Indian Oil would be in no hurry to offload its stake in GAIL (India) Ltd and Oil and Natural Gas Corporation (ONGC) during the current year. Indian Oil plans to sell a fifth of its 9.6 per cent stake in ONGC and up to half of the 4.83 per cent stake in GAIL.

"The timing of our stake-sale then would be determined by market considerations rather than fiscal considerations," he said.

Behuria said Indian Oil would end the year with the net under-recovery at Rs 8,000 crore.

In addition, the company was incurring a loss of Rs 2 per litre on petrol and Rs 3 per litre on diesel. The refining margins of the company stood at $ 2-2.5 per barrel at present.