Government May Extend Easy Loans To Oil Psus

The government may extend temporary advance or easy loans to public sector oil companies to help overcome their liquidity problems.

Petroleum minister Ram Naik said at a press conference here yesterday that this may even obviate the need to issue oil bonds to these companies, in lieu of their arrears from the oil pool account.

Naik said that the government had six months at its disposal to tackle the issue of oil bonds. And in view of the dismantling of the administered pricing mechanism (APM) by March 2002 when the oil pool account will be abolished, the government had the option of issuing short-duration maturity oil bonds as well.