Faced with surging crude oil prices in the international markets and massive under-recoveries being incurred by the oil marketing companies (OMCs), the government has decided to compensate them by issuing oil bonds to the extent of 50 per cent against incurring under-recoveries during 2007-08 on sale of petrol, diesel, kerosene and domestic LPG at subsidised prices. Although the decision to issue the second instalment of oil bonds is not in accordance with the demands raised by the Petroleum and Natural Gas Ministry, the decision has come as a big relief to the bleeding OMCs, who are faced with hiked under-recoveries. The second instalment of oil bonds comes after a meeting between Minister of Petroleum and Natural Gas Murli Deora and Finance Minister P. Chidambaram on Tuesday. Oil bonds of the value of Rs.35,300 crore would be issued to the OMCs. As of now, oil bonds of the face value of Rs.20,333 crore covering the period April-December 2007 have been received.