The divestment plans of state-run Bharat Petroleum Corporation Limited (BPCL) are not on the table as it can’t find an adequate number of bidders for the process, Union Minister for Petroleum and Natural Gas Hardeep Singh Puri said on Thursday, according to media reports.
“We can’t divest BPCL in a scenario where there was only one bidder for it. BPCL is doing well now, divestment is not on the table right now,” the minister said.
The announcement by the minister comes days after reports surfaced of the central government’s plans to pay about Rs 20,000 ($2.5 billion) to the state-run fuel retailers to partly compensate them for losses and keep a check on cooking gas prices.
The oil ministry has sought a compensation of Rs 28,000 crore. However, the finance ministry is agreeing to only about Rs 20,000 billion cash payout.
IOCL, BPCL, and HPCL, the three biggest state-run retailers, which together supply more than 90 per cent of country’s petroleum fuels, have suffered the worst quarterly losses in years by absorbing record international crude prices. While the handout could ease their pain, it would add pressure to the government’s coffers that are already strained by tax cuts on fuels and a higher fertilizer subsidy to tackle mounting inflationary pressures.
Last month, the government had said that it would decide on re-initiating the process of BPCL strategic sale based on a review of the situation in due course.
In a written reply to the Lok Sabha, Minister of State for Finance Bhagwat Kishanrao Karad said the pandemic, energy transition issues, and geo-political conditions affected several industries globally, particularly the oil and gas industry.
The Centre had planned to sell its entire 52.98 per cent stake in Bharat Petroleum Corporation Ltd (BPCL) and invited Expressions of Interest (EoIs) from bidders in March 2020. At least three bids came in by November 2020. However, the privatisation was stalled after two bidders walked out over issues, such as lack of clarity in fuel pricing, with just one bidder left in the fray.