IOC, other PSUs not to bid for BPCL, hints Pradhan

"Since 2014, we have a clear vision that the government has no business to be in business," Dharmendra Pradhan told reporters in New Delhi.

New Delhi: Oil Minister Dharmendra Pradhan on Thursday hinted that public sector firms such as Indian Oil Corporation (IOC) may not be allowed to bid for buying government stake in Bharat Petroleum Corporation Ltd (BPCL), for which a buyer may have to shell out as much as Rs 90,000 crore.

The Cabinet Committee on Economic Affairs had on Wednesday decided to sell the government's entire stake in the country's second-largest state refiner BPCL and India's largest shipping company Shipping Corporation of India (SCI). It also approved the privatisation of Container Corporation of India while also giving a nod to paring stake below 51 per cent in select public sector undertakings but without losing control.

"Since 2014, we have a clear vision that the government has no business to be in business," Pradhan told reporters here. "We have examples of 2-3 sectors such as telecom and aviation where ushering in private participation has led to customers benefiting from price cuts, efficiency, and better service. And yesterday (on Wednesday), several reformist decisions were taken."

BPCL will give buyers ready access to 14 per cent of India's oil refining capacity and about one-fourth of the fuel marketing infrastructure in the world's fastest-growing energy market.

It, however, will be sold after carving out Numaligarh Refinery from its portfolio and given to a pubic sector unit.

"Numaligarh refinery was set up as per Assam Accord and it will remain a public sector unit. Assam Chief Minister had requested Prime Minister (Narendra Modi) to retain public sector character of Numaligarh Refinery and that has been accepted," he said.

Pradhan, however, did not say if IOC or Oil India Ltd, which already has a stake in the refinery and also supplies crude oil to it, will take over the unit.

"The details have to be worked out," he said. "Finance Minister (Nirmala Sitharaman) has stated that the privatisation of BPCL will happen this fiscal and we hope to adhere to the timeline."

Asked if public sector units will be allowed to bid for the government's 53.29 per cent stake, he said: "Nitty-gritty and details of the disinvestment process will have to be worked out but when I say the government has no business to be in business, it is indicative of possible future course of action."

At the current trading price of BPCL, the government's 53.29 per cent stake is valued at a shade less than Rs 62,000 crore. On top of this, the acquirer will have to make an open offer to buy an additional 26 per cent stake from minority shareholders for about Rs 30,000 crore.

Last year, the government had sold its entire stake in Hindustan Petroleum Corp Ltd (HPCL) to state-owned Oil and Natural Gas Corp (ONGC) for Rs 36,915 crore.

Pradhan said the privatisation of BPCL was following the policy of ushering in greater competition in sectors that can sustain on their own.

Greater private participation, like in the telecom and aviation sector, will bring about efficiencies and better service to consumers, he said.

The CCEA had on Wednesday also approved the sale of an entire 63.75 per cent government holding in SCI and 30.8 per cent out of the government's 54.80 per cent stake in Container Corp of India (Concor).

Besides, the government will sell its entire holding in THDC India Ltd (THDCIL) and North Eastern Electric Power Corp Ltd (NEEPCO) to state-owned power generator NTPC Ltd, the finance minister has said.