Ioc Borrowings Ceiling Lifted To Rs 20000 Crore

The Indian Oil Corporation today doubled the cap on its borrowings from domestic banks and financial institutions to Rs 20,000 crore, from the Rs 10,000 crore so far.

Simultaneously, the corporation has also reduced the ceiling on foreign currency loans over a billion dollars (about Rs 4,800 crore), from $5.51 billion to $4.5 billion, after shareholder's approved the resolution at its annual general meeting (AGM) here today.

M A Pathan, chairman and managing director, Indian Oil said, "The increase in domestic borrowings from financial institutions and banks will be used to finance Indian Oil's working capital requirements. The reduction in the foreign currency borrowings' limit follows the government's withdrawal of tax exemptions on such funds."

He added that the corporation would create a security or charge on its assets for issuing bonds, debentures or other combinations to raise the funds.

Pathan put the capital expenditure during the current fiscal at Rs 5,850 crore, of which Rs 940 crore would be raised from the debt market.

Also, capex plans over the next five years would be increased to Rs 40,000 crore, as against Rs 23,000 crore during the previous five years, he said.

Pathan said he expected a huge growth in demand for petroleum products, as per capita consumption of petroleum products in India was among the lowest in the world.

"At nearly 100 kg per annum, the per capita consumption of oil in India is among the lowest in the world, the world average being over 600 kg per annum. This portends high potential for growth," he said.

The company has, meanwhile, put on hold plans of setting up the 500 MW power project at Savli in Gujarat. Senior company officials attributed this to the Gujarat government's reluctance to sign the power purchase agreement with the corporation.

The power project was expected to use the residue from the corporation's Gujarat refinery as feedstock.

Meanwhile, Indian Oil has tightened security at refineries and various petroleum product depots considering threats of sabotage. The corporation has also roped in support from the state government to increase policemen at several locations.

"There were attempts to enter IOC premises. However, the trespassers were dealt with appropriately," Pathan said.