Indian Oil Corporation plan to cut debt hinges on demand revival

New Delhi: Indian Oil Corp’s mountain of debt, which has grown a third in a year to ₹1,16,000 crore, will start diminishing on an expected revival of fuel demand after the easing of lockdown and as benefits of cheaper crude start flowing in, a company executive said.

Gross debt at Indian Oil, the nation’s largest refiner and fossil fuel retailer, has risen from ₹86,400 crore at the beginning of 2019-20 to ₹1,16,000 crore at the start of 2020-21, as per a company executive. The debt had actually fallen at the end of December 2019 to ₹75,700 crore, according to the oil ministry data. About 50% jump in debt in the January-March quarter came following the weakening of demand due to the Covid-19 pandemic, dividend outflow and delay in fuel subsidy transfer by the government.