The oil companies, which are already bleeding on account of surging crude prices, have in the past 10 days suffered more due to depreciation of Indian rupeeagainst dollar.
The value of rupee, which stood at Rs 40 a dollar about 10 days ago, has tumbled to 42-level, leading to heavy losses on payment of crude, say oil industry officials.
This 5 per cent depreciation of the Indian currency would mean that during this period, if the crude oil worth Rs 1,000 crore was imported, then the loss on account of currency fluctuation would be around Rs 50 crore, added the officials.
Adding to woes is the finance ministry’s indication to issue oil bonds only worth 50 per cent of the under recoveries amounting to Rs 35,300 crore to partially offset the Rs 70,000-crore losses, suffered by oil companies during 2007-08 due to rise in global crude prices.
The oil companies had demanded bonds for 57.1 per cent of the under-recoveries, but that proposal has been turned down.
“The finance ministry is not ready for it, so we have requested the finance minister P Chidambaram to issue as much bond limit as possible”, said petroleum minister Murli Deora after meeting him.
On the tricky question of raising the domestic fuel prices, Murli Deora said there was no discussion on it and that it was a policy decision that could be decided only by the cabinet.
The petroleum ministry officials said it was not discussed in the meeting whether the bonds would be taken as mandatory requirement for banks to park their funds in government securities, known as statutory liquidity ratio.
India imports 73 per cent of its crude oil needs and the cost of imports would spiral as it inches higher, while rupee is trading at a 13-month low.
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