By IANS,
New Delhi : The state-owned Indian Oil Corp (IOC) has got a temporary cash injection with the Reserve Bank of India (RBI) raising its credit limit by Rs.200 billion.
IOC, along with other oil marketing companies Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), has been facing a severe liquidity crisis due to high crude prices and huge subsidy burden.
After the oil prices started to slide down over the past few weeks, RBI Governor Y.V. Reddy announced last month that the central bank would stop the special scheme to buy bonds from the oil companies.
London’s Brent crude jumped to an all-time peak of $147.50 a barrel July 11, before it started to go down, falling to about $118 a barrel Wednesday.
As a temporary measure, the petroleum ministry had asked for raising the credit limit of IOC from Rs.450 billion by allowing it to use the Paradeep refinery’s additional credit limit of Rs.200 billion.
According to petroleum ministry additional secretary S. Sundareshan, RBI Tuesday allowed IOC to convert the Paradeep refinery’s credit limit into working capital.
This is expected to help IOC stay afloat till the oil bonds for the second and the third quarters are issued together by September-end, after parliamentary approval.
HPCL and BPCL are also expected