Borrowings of IOC up 20%

Indian Oil Corporation's (IOC) borrowings have shot up by nearly 20 per cent in the last two months to around Rs 13,000 crore due to high international prices.

A senior IOC executive said, "Because of continued under recovery, borrowings have increased from Rs 10,900 crore on the company's books at the end of June this year to around Rs 13,000 crore now."

If this trend continues, it would be worrying for the company." The government has repeatedly stopped oil marketing firms from raising prices. The Centre recently reduced petroleum duties to ensure that retail prices did not rise due to an increase in international prices.

"Given the compulsions, we need to borrow since our ways and means position is really tight," the executive said.

IOC, however, intends to restrict its borrowings mainly to the domestic market since the Indian rupee has appreciated in the last few weeks making foreign currency loans costlier.

"The position is dynamic and we are watching the exchange rates closely. But for the moment it looks that rupee borrowings make more sense," the IOC executive added.

IOC's foreign borrowing ceiling is estimated at $ 1.7 billion in addition to the FCNR limits.