Centre Permits 100% FDI In Oil, Gas State-Run Firms Approved For Disinvestment

The federal government on Thursday permitted 100 per cent overseas funding below the automated route in oil and fuel PSUs which have acquired in-principle approval for strategic disinvestment. The transfer would facilitate privatisation of India’s second-biggest oil refiner Bharat Petroleum Corp Ltd (BPCL). The federal government is privatising BPCL and promoting its complete 52.98 per cent stake within the firm. In accordance with a press word of the Division for Promotion of Business and Inside Commerce (DPIIT), a brand new clause has been added to the FDI coverage for oil and pure fuel sector.

“International funding as much as 100 per cent below the automated route is allowed in case an ”in-principle” approval for strategic disinvestment of a PSU has been granted by the federal government,” it stated. The choice relating to this was taken by the Union Cupboard final week.

Two out of the three firms which have put in an preliminary expression of curiosity (EoI) for getting out the federal government’s complete 52.98 per cent stake in BPCL are overseas entities. The FDI restrict in PSU-promoted oil refineries will proceed at 49 per cent — a restrict that was set in March 2008.

As of now, the federal government is promoting the stake in solely BPCL. Indian Oil Company (IOC), the nation’s largest, is the one different oil refining and advertising and marketing firm below direct authorities management. Hindustan Petroleum Company Ltd (HPCL) is now a subsidiary of state-owned Oil and Pure Fuel Company (ONGC).

The federal government had in March 2008 raised the FDI restrict in oil refineries promoted by public sector firms from 26 per cent to 49 per cent. The agency buying the federal government’s 52.98 per cent stake in BPCL will even need to make an open provide to purchase a further 26 per cent stake from different stakeholders on the identical worth, as per the takeover guidelines.

Mining-to-oil conglomerate Vedanta and US-based personal fairness companies Apollo World and I Squared Capital’s arm Suppose Fuel are within the race to purchase the federal government’s stake in BPCL.