Petroleum Minister Murli Deora said on Monday that the government would issue Rs 11,500 crore (Rs 115 billion) bonds before March 15, with the first tranche coming on Wednesday. The average rate of return would be 7.3 per cent.
Deora, who met Finance Minister P Chidambaram, said the petroleum ministry had demanded that the government bear the higher subsidy burden. "If food and fertilisers can get huge subsidies, then why cannot the petroleum sector?" he asked.
The minister met Chidambaram to discuss petrol pricing. Deora also discussed with him the matter of oil firms incurring huge losses due to subsidies. The issues of duty rationalisation and infrastructure status for pipelines were also taken up.
"The finance minister agreed on certain demands, but did not give in to others and whether some amendments may take place is still to be decided," he said.
He added that the C Rangarajan Committee report, which had suggested an increase in cooking gas prices by Rs 75, was not discussed.
Earlier, the petroleum ministry had demanded a package along with the issue of oil bonds to help oil marketing companies tide over their losses. The government, however, only approved the proposal for issue of oil bonds.
The ministry had asked for an increase in the price of petrol by Rs 3 per litre, diesel by Rs 2 per litre, PDS kerosene by Re 1 per litre and LPG cylinder by Rs 20.
It was also proposed that the oil marketing companies be given freedom to increase the price of diesel up to an approved limit and of cooking gas by Rs 5 per cylinder in a month during 2005-06. In addition, it was sought that the specific excise duties be reduced by a rupee on a litre of petrol and diesel.
The petroleum ministry had also asked for an approval in-principle for identifying families below the line for distribution of PDS kerosene and making available open market kerosene to others.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
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