THE government has issued oil bonds worth Rs 10,306.33 crore to three oil marketing PSUs to compensate them for selling sensitive petroleum products below market price. 

The finance ministry informed that the ‘oil marketing companies government of India special bonds’ with a coupon rate of 8.20% were issued to IOC, HPCL and BPCL. The bonds, which these firms can offload in the market, will mature in 2024.

While IOC received bonds to the tune of Rs 6,207.06 crore while HPCL and BPCL received bonds worth Rs 2,033.99 crore and Rs 2,065.28 crore, respectively.

Investment in these bonds by banks and insurance companies will not be reckoned as an eligible investment in government securities for their statutory requirements. However, investment in them by insurance companies will be counted as investment under “other approved securities” as defined under the Insurance Regulatory and Development Authority (Investment) Regulations, 2000, the ministry added.

Investment by provident funds, gratuity funds, superannuation funds etc will be treated as eligible investment under the administrative order of the finance ministry.