IOC to sell Rs 2,000 cr bonds in January

Public sector Indian Oil Corporation will sell bonds worth Rs 2,000 crore this month to tide over a financial crunch due to non-revision of fuel prices, Chairman Sarthak Behuria said today.

"The company was losing Rs 165 crore per day on sale of petrol, diesel, LPG and kerosene, and was facing a shortfall in working capital fund," Behuria said here.

Crude oil prices touched (rpt) touched $100 a barrel mark yesterday evening in New York, triggering a possible government response to reduce the under-recoveries by public sector oil firms.

IndianOil, Bharat Petroleum and Hindustan Petroleum are projected to lose Rs 69,753 crore on fuel sale as the government has not allowed them to raise prices in line with the price of imported crude.

IOC Director (Finance) S V Narasimhan said: "We are optimising inventory, reducing working capital and maximising throughput to mitigate the impact of rising crude oil prices."

The company's borrowings, which stood Rs 27,000 crore on September 30, 2007, have risen to over Rs 29,000 crore as it borrowed money to meet the working capital requirement in the absence of remunerative fuel prices.