Moneycontrol | BPCL divestment is not on the table right now: Hardeep Singh Puri

Sep 15,2022

Union Minister for Petroleum and Natural Gas Hardeep Singh Puri on September 15 said that the divestment of Bharat Petroleum Corporation Limited (BPCL) is not on the table “as of now” and did not give any timeline for when it may be considered.

On May 26, the government said it has called off the ongoing process of strategic disinvestment of BPCL. The government has said that the plan would be reinitiated after review.

“We want to disinvest, but we cannot have a situation where there's only one bidder…in the last year or so, we've been facing a bit of turbulence but despite that BPCL has done very well,” Puro said.

“For now, it (the divestment) is not on the table,” Puri said.

The Indian government had ambitious plans to sell its entire 53% stake in BPCL to private players in 2021-22; the target was later moved to 2022-23 and eventually scrapped. Potential buyers who showed interest– Anil Agarwal-led Vedanta Group, Apollo Global Management and private equity major I Squared Capital-backed Think Gas– could not tie up the funds required for the deal and two of them dropped out. On April 22, Moneycontrol was the first to report, quoting Anil Agarwal, chairman of Vedanta Resources, that the government has decided not to go ahead with the privatisation plan.

On Compensation for Oil Marketing Companies (OMCs)

Recent media reports suggest that the government plans to pay about Rs 20,000 crore to the state-run OMCs like BPCL, Hindustan Petroleum Corporation Ltd and Indian Oil Corporation Ltd, to partly compensate them for losses and keep a check on cooking gas prices. Reports suggested that the oil ministry has sought a compensation of Rs 28,000 crore, but the finance ministry is agreeing to only about Rs 20,000 billion cash payout.

When questioned about this compensation, Puri said that the finance ministry would give “deep thought and due diligence” to the matter.

“I personally, as the line minister, have to worry about their (OMCs) financial health,” Puri said.

On Windfall Tax

In July, India first imposed windfall profit taxes, joining a growing number of nations that tax super normal profits of energy companies. Crude oil prices have since then come off highs, reducing the profit margins of oil producers and refiners.

Puri said that this was under the purview of the finance ministry and they would continue to review it every fortnight.