Indian Oil Corp (IOC) has got shareholders' nod to raise its borrowing limit by

RELATED ARTICLES BPCL, HPCL, IOC rally on petrol price hike HPCL, IOC gain on fuel price hike reports

Rs 30,000 crore to Rs 110,000 crore as the nation's largest fuel retailer has grown increasingly reliant on debt to meet even its day-to-day expenses.

IOC said its shareholders have through a postal ballot approved an "increase in the borrowings limit from Rs 80,000 crore to Rs 110,000 crore."

The company loses Rs 158 crore per day on selling diesel, cooking gas (LPG) to households and kerosene at government-controlled rates, which are way below their production cost.

The revenue deficit on these products is met through market borrowings, a company official said. "We have almost exhausted all of the permitted borrowings and so we went to shareholders for raising the limit," the official said.

IOC, which had in 2008 doubled its borrowing limit to Rs 80,000 crore, currently has gross debt of over Rs 78,000 crore.

With continued losses, the company feared borrowings may cross the approved level of Rs 80,000 crore by December. The company, in which the government owns a 78.92 per cent stake, had last month initiated a process to raise its borrowing limit through a postal ballot.

The company currently loses Rs 7.06 on sales of every litre of diesel, Rs 25.90 per litre on PDS kerosene and Rs 270.50 per 14.2-kg domestic LPG cylinder.

"At the current rate, IOC will end the fiscal with a revenue loss of Rs 64,010 crore," the official said, adding that in the second quarter ended September 30, it lost about Rs 8,000 crore on selling the three fuels below cost.

The company loses 10-15 paisa per litre on the sale of petrol, a commodity which was decontrolled in June last year.

While freeing petrol pricing from its control, the government had stated that diesel would also migrate to a free price regime shortly. But diesel rates have not been freed till now.