ONGC does not have the capacity to take the burden of rising fuel prices, reported The Economic Times.

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The company executives said that the company, which is a traditional cushion against fuel price, is now left with little muscle to absorb the burden, ET reported on Friday.

As per the report, earlier when the company sold oil at discounted rates, it was virtually debt free. But now with heavy capex plans and recent acquisitions, the company could risk facing a rating downgrade if it decides to subsidise fuel.

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The firm is also facing the heat of borrowings amounting to Rs 25000 crore that it took for HPCL acquisition, said the report. “Any more borrowing to support subsidy sharing programme could deteriorate our debt-equity ratio and give rise to a rating downgrade risk,” an executive was quoted saying in the report.

The report comes at a time when reports are coming out about a probable government plan to check fuel price by asking ONGC to sell crude oil at prices below the international rate. The BJP- led government is facing criticism after the prices of petrol and diesel reached unprecedented levels in the country.

First Published:May 25, 2018 10:31 AM IST