Thursday, April 27 2006 12:09 Hrs (IST) - World Time -

New Delhi: State-owned Indian Oil Corp today (Apr 27, 2006) sold a fifth of its 9.2 per cent stake in Oil and Natural Gas Corp (ONGC) to garner Rs 3,685 crore that will bridge the shortfall in revenue arising from non revision of fuel prices despite spiralling crude oil prices.

IOC sold 27.41 million shares or 1.92 per cent of ONGC, for Rs 1,345 per share in a sale managed by Morgan Stanley and Citigroup Inc, company sources said.

The company offered ONGC shares in the price band of Rs 1,330 to 1,399 per share. The shares were picked up by institutional investors.

Sources said IOC was losing Rs 80 crore everyday on sale of petrol, diesel, LPG and kerosene below the production cost and sale of shares in ONGC was to partly meet the working capital requirement.

State-run Indian refiners have been unable to raise government-capped retail fuel prices since September last year, despite the surge in crude oil prices.

The non-revision of retail prices of petroleum products by the government is expected to lead to under-recoveries of an estimated Rs 57,000 crore by oil marketing companies - IOC, Bharat Petroleum Corp and Hindustan Petroleum Corp in 2006-07.

The three together lost Rs 4,722 crore in revenues in April.

In the year 2005-06, the OMCs' gross under-recoveries amounted to Rs 39,600 crore.

Petrol in Delhi is being sold at a loss of Rs 5.66 per litre, diesel at Rs 7.64 per litre, kerosene at Rs 14.29 alitre and domestic LPG at a loss of Rs 195.10 per cylinder.

IOC had on March 2 sold half of its 4.8 per cent stake in gas utility GAIL (India) Ltd for Rs 561 crore to repay part of its debt and fund expansion.