The Union Government announced to issue the oil bonds worth Rs 22,000 cr to three oil marketing companies of the country. Indian Oil Corporation, Hindustan Petroleum, and Bharat Petroleum would get Rs 11,975.51 crore, Rs 4,693.73 crore and Rs 5,330.76 crore respectively.

The bonds are issued to compensate the oil marketing companies for selling petroleum products at the subsidized rates. The decision would help to reduce the impact of under recoveries by the companies in the current financial year on account of fluctuations in the crude oil prices in the international market. It would also help to satisfy the forex needs of the oil marketing firms.

It is the first time in six years when the companies are selling petrol at profit of Rs 11.48 per liter and diesel at the profit of Rs 2.92 per liter following the significant decline in the prices of crude oil in the international market. However, they are still bearing a loss of Rs 17.26 per liter on kerosene and Rs 148.38 on domestic LPG cylinder.

The government has estimated a loss of Rs 110381 crore to the oil marketing companies in the current financial year.