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Indian Oil Corporation Ltd has raised its borrowing limit by Rs 30,000 crore to Rs 1,10,000 crore.
Indian Oil has informed the BSE that its shareholders have given their nod through postal ballot for increasing the borrowing limit from Rs. 80,000 crore to Rs. 1,10,000 crore. The company's current borrowings stood at about Rs 76,000 crore.
In 2008, Indian Oil had doubled its borrowing limit.
The financial health of the oil retailing companies – Indian Oil, Bharat Petroleum Corporation, Hindustan Petroleum Corporation – has been a cause of concern for the Government. The companies have to incur revenue loss for selling petroleum products below the market price.
Mr S. Jaipal Reddy, Minister for Petroleum & Natural Gas, recently said that the diminishing cash flows had reduced resource generation for expansion and modernisation. “The oil companies are forced to borrow for their working capital requirements,” he added.
During the current fiscal, Indian Oil is projected to lose Rs 64,010 crore because of selling diesel, kerosene under the public distribution system, and domestic LPG at Government-controlled price.
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