The oil industry kitty had generated a surplus of more than Rs 12,000 crore in the last 17 months and was able to pay off most of the oil bonds issued in lieu of the Union government's dues to petroleum companies. Only Rs 410 crore of the Rs 12,984 crore oil bonds now remain to be redeemed, but the Centre is unlikely to be able to pay for them by March next year, as planned.

The oil pool is poised to go deeply in the red instead. The account already has a deficit of Rs 240 crore because of the tremendous increase in the import bills of subsidised products like kerosene and LPG (liquefied petroleum gas). Diesel imports, which had ceased to be the business of the oil pool in September 1997, will cost the kitty another Rs 500 crore.

The total dent in the pool is expected to be more than Rs 1150 crore and could get bigger if the spurt in crude oil prices persists. Thesteady climb in crude prices to $20 a barrel this week from $14 a barrel in April has pushed up prices of petroleum products.

The country's import bill has overshot projections, which in turn has upset calculations that had gone into the pool account. Jumping crude oil prices pushed up prices of petroleum products by between 30 per cent and 70 per cent in the last five months.

The import bill for both crude oil and petroleum products is expected to overshoot the initial estimates by $5 billion, to touch $12 billion by March-end, next year.