Press Trust of India Posted online: Sunday, September 12, 2004 at 1307 hours IST
New Delhi, September 12: The World Bank has suggested that India can hedge risk of its crude oil import bill spiralling with surge in international prices, by investing in oil price-linked bonds where returns multiply with rise in crude prices.
The multilateral lending agency in a presentation to Petroleum Minister Mani Shankar Aiyar on September 10 stated that returns on investments in the bonds would depend on the price of oil - higher coupon in high oil price environment and low coupon in low oil price environment.
"This way though India will pay a higher price for importing crude oil during times of global surge in prices, a part of the rise in cost will be compensated from the returns on the bonds issue," officials said.
India's crude oil import bill has jumped by 51 per cent to Rs 29,551 crore in the first quarter of current fiscal on the back of sharp spike in international oil prices.
