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India may give cash subsidy to PSU oil companies instead of oil bonds

The Indian government is likely to pay cash, instead of issuing bonds, to subsidize state-owned oil marketing companies on the revenue loss incurred on the sale of cooking fuels during the current financial year to March, a senior finance ministry official said. The government has been issuing oil bonds to state-owned fuel retailers since 2005-06, and has so far issued 1.42 trillion rupees (US$30.46 billion) worth of bonds to Indian Oil Corp. Ltd., Hindustan Petroleum Corp. Ltd. and Bharat Petroleum Corp Ltd. The official said the finance ministry is likely to take a final call on the cash subsidy after an expert committee on fuel pricing submits its recommendations.ย ย  (December 15, 2009)