New Delhi: The financial reports released by the three state-run oil marketing companies (OMCs) have showed that the combined debt on Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) has touched a five-year high of Rs 1.62 trillion as of March 2019. The figure has gone up by 30 percent since last year when it hovered around Rs 1.25 trillion. At the end of financial year 2018-19, IOC had the highest debt at Rs 92,712 crores, while BPCL followed at Rs 42,915 crore and HPCL at Rs 26,036 crore.
Spike in debt most due to capex
The debt seems to have mounted mostly because of capital expenditure, delays in payment of subsidy for liquefied petroleum gas (LPG) and kerosene from the government. However, this amount is still lower than the debt accumulated at the end of FY14 — Rs 1.76 trillion — when oil prices had hit $100 per barrel.
Each OMC increased its debt by Rs 5,000-10,000 cr
In the fourth quarter of FY 2018-19, the debt of the three OMCs rose by Rs 5,000-10,000 crore each due to delays in payments of subsidies. IOC had the largest debt pile primarily because it paid a higher dividend to the government, subsidy arrears and entry tax for the Mathura refinery.
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