Bharat Petroleum May Not Be Sold To Private Firms In 2020; Govt’s Privatization Plans Disrupted?
After the Government announced that the privatization plans for the PSU Banks were postponed, reports are now coming in that the sale of the BPCL stake will also be crossed out this fiscal.
The Government’s stake in Bharat Petroleum Corporation Limited (BPCL) was set to be sold off by the end of this year, 2020.
Why has the Government taken a step back from the sale of the BPCL stake? Let’s find out!
Government Not To Sell Off BPCL; Disinvestment Target Of This Fiscal To Be Affected
As per reports, the Government has decided not to sell off the 53% stake that it possesses in the BPCL this fiscal. Apparently, senior officials weren’t very hopeful of the selloff happening in this fiscal, and this is bound to affect the disinvestment targets of the Indian government.
As revealed earlier by the Finance minister Nirmala Sitharaman, the Government of India has a disinvestment target of Rs. 2.10 lakh crore, which is being drawn from the sell off of PSUs (Rs. 1,20,000 crore) and government’s stake in banks and financial institutions (Rs. 90,000 crores.)
However, this is the third time that the deadline for the submission of EoIs has been extended, which makes us wonder if the target can be successfully achieved or not.
The strategic divestment of public sector companies such as BPCL, Container Corp and Shipping Corp, and the insurance giant LIC, would account for a huge chunk of this target.
Recently, the Government went back on its plans to privatize the PSUs, including Uco Bank, Punjab & Sind Bank, and Bank of Maharashtra. Only IDBI Bank was not taken off the list.
Why Won’t The Government Sell Off Its Stake in BPCL?
The senior officials have revealed that they will be observing the development of the situation after September, which is the new deadline to submit the expressions of interest (EoI).
They have also revealed that a sell off exercise takes up about 9 to 12 months and if EoIs are submitted by September, financials of the BPCL can be studied through the access granted to the data room.
Also, as international flights aren’t functioning normally yet, the global bidders would not be able to travel immediately.
Some big names, including Saudi Aramco, Abu Dhabi National Oil Co (Adnoc), Rosneft of Russia, Exxon Mobil, and Reliance will be participating in the bidding process.