News Release Details
Domestic crade oil basket logs new high at 877.26 a barrel
New Delhi 25-Sep-2007
'T'he basket of crude oil that J. Indian refiners buy reached another all-time-high of $77.26 a barrel on Friday, the latest day for which data are available, putting further pressure on the finances of oil-marketing companies."Our inability to raise prices of petroleum products has squeezed operating costs. Our borrowings have already reached Rs 2.6,000 crore in this financial year," said a senior official with IndianOil , the country's largest marketer of petroleum products. Last year, the company's borrowings totalled Rs 27,000 erore, when the average price of the Indian crude oil basket was $62.46 per barrel In the current financial year so far, the average price — despite being partly offset by an appreciating rupee — is $69.07 a barrel, The borrowings have been huge even though since April, IndianOil has sold Rs 4,000 crore worth of oil bonds issued by the government to compensate it for selling petrol, diesel, kerosene and LPG at subsidised prices. It plans to sell Rs 2,000 crore worth of bonds in October. "However, if crude oil prices continue increasing, our borrowings will continue to rise," said the official Prices of petrol, diesel, LPG and kerosene are, controlled by the government. Although oil marketing companies have the freedom to set prices of products such as napththa and aviation fuel, the four other products (petrol, LPG, diesel and kerosene) account for almost '75 per cent of the total sales. "There have been proposals for raising money from the market to meet our working capital needs. However, the board has not cleared the proposal as the company is heavily undervalued at the moment," the IndianOil official said. The company's shares on the Bombay Stock Exchange are trading at Rs 400-410 per share. "We will have to wait for the share price to increase, only then can we raise funds from the stock market," said another IndianOil official. Investors are not very bullish on the stocks of the three government-owned oil marketing companies - IndianOil , Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL). BPCL Chairman and Managing Director Ashok Sinha told the company's shareholders at the annual general meeting last week that the sale of petroleum products at below-cost prices had pressured the company's cash flows.
New Delhi 25-Sep-2007
'T'he basket of crude oil that J. Indian refiners buy reached another all-time-high of $77.26 a barrel on Friday, the latest day for which data are available, putting further pressure on the finances of oil-marketing companies."Our inability to raise prices of petroleum products has squeezed operating costs. Our borrowings have already reached Rs 2.6,000 crore in this financial year," said a senior official with IndianOil , the country's largest marketer of petroleum products. Last year, the company's borrowings totalled Rs 27,000 erore, when the average price of the Indian crude oil basket was $62.46 per barrel In the current financial year so far, the average price — despite being partly offset by an appreciating rupee — is $69.07 a barrel, The borrowings have been huge even though since April, IndianOil has sold Rs 4,000 crore worth of oil bonds issued by the government to compensate it for selling petrol, diesel, kerosene and LPG at subsidised prices. It plans to sell Rs 2,000 crore worth of bonds in October. "However, if crude oil prices continue increasing, our borrowings will continue to rise," said the official Prices of petrol, diesel, LPG and kerosene are, controlled by the government. Although oil marketing companies have the freedom to set prices of products such as napththa and aviation fuel, the four other products (petrol, LPG, diesel and kerosene) account for almost '75 per cent of the total sales. "There have been proposals for raising money from the market to meet our working capital needs. However, the board has not cleared the proposal as the company is heavily undervalued at the moment," the IndianOil official said. The company's shares on the Bombay Stock Exchange are trading at Rs 400-410 per share. "We will have to wait for the share price to increase, only then can we raise funds from the stock market," said another IndianOil official. Investors are not very bullish on the stocks of the three government-owned oil marketing companies - IndianOil , Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL). BPCL Chairman and Managing Director Ashok Sinha told the company's shareholders at the annual general meeting last week that the sale of petroleum products at below-cost prices had pressured the company's cash flows.