India moving 'cautiously' on oil refiner BPCL's privatization: minister

Oct 15,2020

India is "treading very cautiously" in its plan to privatize state-run oil refiner Bharat Petroleum Corp Ltd, Oil Minister Dharmendra Pradhan said on Tuesday, in a sign that the process could be delayed.

New Delhi's plan to sell its 53.29 per cent stake in BPCL was first announced in November 2019 and is part of a broader programme to spin off or sell stakes in dozens of state-owned companies. India had planned to sell the stake by the end of the fiscal year to March 2021.

Pradhan told a virtual energy conference, "Bharat Petroleum divestment is very much on the card per cent. But we all will appreciate looking into the net worth and looking into the size ... the government is treading very cautiously on how to offload the stake through a proper process".

It was reported last month that Bharat Petroleum Corp Ltd's privatization could spill over into the next fiscal year that begins in April 2021 and that Saudi Aramco and Russia's Rosneft may not participate in the bid as low oil prices affect their investment plans.

Bharat Petroleum Corp Ltd's shares have downfallen by about 38 per cent from highs seen in November last year as fuel demand in India has been hit by restrictions imposed to stem the spread of the coronavirus.

Long term, India's demand for refined products is expected to rise, requiring a 40 per cent increase in the country's refining capacity to 350 million tonnes a year or 7 million barrels per day by 2030, Pradhan said.

India plans to build a 1.2 million barrels per day refinery and petrochemical plant on the country's west coast through a joint venture made up of Indian state refiners, Saudi Aramco and Abu Dhabi National Oil Co.

But the project has been held up as the joint venture has not yet acquired land after protests from farmers.

Pradhan said the local issues impacting the project would be sorted out "very soon."

The minister also said that the federal government planned to gradually end the subsidy on cooking gas.

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