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BPCL, HPCL worth Rs 20,000 cr each: Oil ministry

Our Correspondent in New Delhi

State-run oil retailing companies Bharat Petroleum and Hindustan Petroleum are worth Rs 20,000 crore (Rs 200 billion) each, the petroleum ministry is likely to plead before the Cabinet Committee on Divestment slated to meet on September 7, while calling for offloading government equity to larger Indian public through public offers.

The government had invested Rs 49 crore (Rs 490 million) as equity in the two public sector oil units when they were nationalised in 1974.

Today their worth has leaped to Rs 20,000 crore (Rs 200 billion) each, Petroleum Minister Ram Naik is likely to state at the CCD meeting while making a case for public offering of equity shares.

While no additional budgetary support was provided, the present combined equity base of Rs 700-800 crore (Rs 7-8 billion) was the result of bonus and stock-splits, highly places sources said.

Opposing strategic sale, Naik's presentation would highlight the strategic importance of oil sector drawing parallel with the 1971 experience when the privatised oil sector refused to co-operate with government during the war.

The presentation would ask CCD members to decide if public monopoly or privatised companies would serve national interest in the event of war or contingencies like volatile international oil market, sources said.

"The wealth that has been created over the years belongs to Indian public. If government equity is to be divested, they (public) should be the first beneficiary," Naik would state.

Sources said if strategic sale is what CCD decides then Naik is likely to bargain for allowing public sector companies like ONGC to bid.

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