Indian cabinet to finalize stake sale in oil firms tomorrow

Thursday, 26 December 2002, 08:00 Hrs
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The Indian government's privatisation panel will meet Friday to finalise the roadmap for divesting its stake in two blue-chip oil firms that had been halted due to political squabbling, official sources said Thursday.

NEW DELHI: The Cabinet Committee on Disinvestment (CCD) will decide on the size of the stake in the state-run oil firms - Hindustan Petroleum Corporation Ltd. (HPCL) and Bharat Petroleum Corporation Ltd. (BPCL) -- that the government would sell, the sources said.

"After a decision is taken by the committee on the amount of government stake in HPCL and BPCL to be offloaded, the actual process of divestment in the two companies will begin," said a disinvestment ministry official.

Disinvestment Minister Arun Shourie told the Lok Sabha this month that the government would sell its stake in HPCL to a private company and privatise BPCL through public offering.

But apart from providing no timetable for the sale, Shourie was silent on how much of its stake in the oil refiners the government would sell.

The government had postponed the sell-off process of two oil giants, which together control 40 percent of India's two million barrel-a-day oil market, for three months in September in the face of intense political squabbling.

It found common ground on its stalled privatisation programme two days before the end of three-month moratorium period to decide the stake sales of HPCL and BPCL.

The market value of HPCL and BPCL shares had dropped over 30 percent in September after Petroleum Minister Ram Naik and Defence Minister George Fernandes forced through a three-month delay on selling stakes.

India's privatisation drive, projected as the cornerstone of the reforms programme, has repeatedly come under attacks in recent months, with the ruling coalition's allies demanding review of the divestment agenda.

The government raised 48 billion selling state-run companies in April to October this year, less than half of the 120-billion target set for the year to March 2003.

The government ignored criticism and sold its stake in the telecom giant Videsh Sanchar Nigam Ltd. (VSNL), oil firm IBP and the country's largest joint venture carmaker Maruti Udyog Ltd. this year.

Source: IANS

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