In February this year, Petroleum Secretary MS Srinivasan, had said that the government would bear 57 per cent of the total under-recovery of oil three oil marketing companies- Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) - through oil bonds.
In 2007-08 the three oil marketing companies incurred Rs 77,300 crore loses. Around Rs 20,000 crore worth of oil bonds have already been disbursed at a burden sharing of 57 per cent. Another Rs 20,000 crore needs to be given to the oil marketing companies.
These bonds, which are issued to partly compensate oil marketing companies for selling petrol, diesel, LPG and kerosene at subsidised prices, are primarily bought by Life Insurance Corporation of India (LIC), usually at a discount.
