Date:11/10/2008 URL: http://www.thehindubusinessline.com/2008/10/11/stories/2008101150020200.htm

Back Monthly oil import bill of refiners 30% lower

Pratim Ranjan Bose

Kolkata, Oct. 10 Weakening of Indian rupee notwithstanding, a sharper fall in crude prices reduced the monthly oil import bill of Indian refiners by nearly 30 per cent. Under-recoveries have also come down drastically.

The country’s largest refiner, Indian Oil — importing approximately 75 per cent of its annual requirement of 48 million tonnes — said its monthly bill on crude oil purchases is down from approximately $4 billion in July this year when oil was ruling over $140 a barrel to between $2 billion and $2.5 billion.

“Indian crude basket is now about to touch $75 a barrel from over $132 a barrel. Sharp fall is also witnessed in the international oil product market. Diesel (HSD) prices have already come down to $85-90 a barrel and petrol (MS) is ruling at around $90. Overall the situation is reasonably comfortable that it was a few months back” a senior IOC official told Business Line.

India basket crude averaged at $96.81 in September, down from $113.05 in August and $132.47 in July.

On liquidity, he said that the delay in releasing bonds has created some pressure on the finances leading to rise in borrowings. Though did not disclose the company’s total borrowings as on September 30, 2008, the official denied any liquidity crunch.

“Thanks to continuous support from SBI and other banks through enhancing our credit limits, we are not facing any liquidity crunch. Moreover, once the Government releases the bonds, our borrowings will come down to the reasonable levels of Rs 30,000-35,000 crore,” the source added.

Meanwhile, the company’s under recoveries have come down from Rs 420 crore a day in July to Rs 193 a day as on September 30.