User talk:JyotiAgarwal

OIL BOND

The ‘oil bonds’ are issued by the government to the state owned oil marketing companies against the losses they incur. In India the total loss is estimated to be Rs. 65,000 crore in FY08. Prices of petrol, diesel, kerosene and LPG in India are still administered. The oil marketing Companies are making losses as present prices of these four petroleum products correspond to the crude oil price of $56 per barrel against the actual price of above $90 per barrel.

Technically, this ‘oil bonds’ should be counted in the fiscal deficit.

The oil marketing companies are issued oil bonds. When the price of crude (raw material) was up their selling price was fixed (Since the Govt. did not want the retail price of oil to go up). The Govt. to compensate these oil marketing companies issued them with bonds called "oil bonds" - These are redeemable after a period and equal the difference between the normal and subsidized price of petrol and diesel.

Issues oil bonds and increases expenditure; raises taxes to make up for the oil bonds. Therefore, instead of paying more for oil people are paying more taxes. --JyotiAgarwal (talk) 05:11, 14 May 2008 (UTC)