Suresh Kumar Agrawal, acting managing director of the corporation, said the corporation is in dire need of money, particularly as it would need to make additional payment to the Indian Oil Corporation (IOC) on Thursday to step up supplies.[break]
Agrawal, who is facing criticism for not being able to regularize supplies, disclosed to Republica that the corporation´s expectation to get the fund at the earliest has hit a snag mainly after the Ministry of Finance (MoF) neither arranged collateral nor pledged government guarantee to convince Citizens Investment Trust CIT) to issue loans.
“Apparently, the Cabinet while taking the decision to arrange fresh loans for us this time did not take any decision on backing up the loans through collateral or government guarantee,” said a senior NOC official.
As a result, MoF referring to lack of such a decision has refused to pledge a government guarantee for fresh loans. CIT, which has been asked to provide the loans to the corporation, says it will not issue loans unless the government offered guarantee for the repayment of the loan.
In the past, the Cabinet while arranging loans for NOC from financial institutions used to instruct MoF to either arrange collateral or issue government guarantee to back up the loans for the technically insolvent state-owned petroleum import monopolist.
Following such technical hiccups, NOC has knocked at the doors of the Ministry of Commerce and Supplies for a bailout plan. “Hopefully, the ministry takes a fresh proposal for government guarantee to the Cabinet and get it endorsed,” said Agrawal.
However, the proposal, MoF nod, and final endorsement by the Cabinet are expected to take quite a few days. Once that process is complete, CIT again is expected to take additional time to complete the formalities. “We doubt the process could linger the release of fund for around a week,” said a source at NOC.
Meanwhile, scarcity of petroleum supplies, particularly liquefied petroleum gas and petrol, continue to trouble general consumers. Long queues continue to prevail at petrol pumps while consumers failing to secure LPG from retailers are rushing to bolting plants.
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