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| HPCL to up borrowing limit by Rs 10,000 cr |
| Ajay Modi / New Delhi Feb 23, 2012, 00:16 IST |
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With non-revision in prices of controlled petroleum products such as diesel and continued surge in crude oil price, state-owned oil marketer Hindustan Petroleum (HPCL) is looking to increase its borrowing limit by Rs 10,000 cr to Rs 42,000 cr. The country’s biggest oil marketer Indian Oil had earlier raised borrowing limit by Rs 30,000 cr to Rs 110,000 cr in October last year.
HPCL’s borrowings recently touched an all-time high of Rs 31,000 cr, surpassing the earlier record of Rs 28,000 cr in 2008 when crude oil had hit an all-time high of $147 a barrel. “Since there is a delay in the compensation of under-recoveries by the government, we are seeking shareholders’ approval to increase borrowing limit from net worth plus Rs 20,000 cr to net worth plus Rs 30,000 cr. The company’s net worth is Rs 12,000 cr,” said B Mukherjee, director (finance).
There has been a continuous increase in crude oil prices with the Indian basket of crude rising close to $120 a barrel from the average price of around $110 in January. However, prices of controlled petroleum products have not increased due to assembly elections in five states.
Even prices of petrol, a decontrolled product, have been not increased. Oil companies have an under-recovery of Rs 12.31 on every litre of diesel, Rs 28.77 on kerosene and Rs 378 on cooking gas cylinder. Companies are also losing around Rs 3.20 on every litre of petrol.
This has caused an increase in the under-recovery or revenue losses of these companies. At the same time, there is a delay in grant of cash compensation from the government with the result that borrowings of these companies to fund working capital requirements have been going up.
The last revision in prices of three controlled products was made in June last year. Due to a non-revision in prices, companies have declared loss in the nine month period of the fiscal. HPCL had declared a net loss of Rs 3,720 cr in the period.
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