Fewer oil bonds may be issued

The petroleum ministry is likely to review the quantum of bonds needed to offset the under-recoveries of oil marketing companies, which are lower than expected.

With drop in the Indian crude basket to around $62, margins on retail sales of petrol will be positive from Saturday. The under-recoveries on diesel will also come down.

"The under-recovery amount on diesel will be reduced to Rs 5 per litre from tomorrow," a senior BPCL official told Business Standard.

The prices that oil marketing companies pay the refiners are reviewed every fortnight and adjusted to reflect movement in the price of crude in the Indian basket.

"An assessment will done on the stability of the prices, which may result in lowering of the amount of oil bonds that will be issued," a government official said.

Finance Minister P Chidambaram had earlier this week said that the oil bonds would be issued within this month.

The government has approved issuance of oil bonds worth Rs 14,150 crore.