Homegrown Vedanta and two international funds have shown initial interest in buying the government’s entire majority stake in BPCL. The government will call price bids after evaluating the three players’ suitability on technical grounds.
“When the price bid will come up, I’m hopeful some of the major players will come through this investment mechanism, these funds,” Pradhan told a TV channel, referring to the funds that have shown interest. He didn’t elaborate on this.
BPCL, which controls 35 million tonnes a year of refining capacity and about a fifth of the fuel retail market, has been seen as a prized asset for anyone seeking a quick and strong presence in the Indian oil market. But the arrival of the deadly coronavirus that hit global demand, squeezed oil companies’ cashflows, and shook investors’ faith in the oil business also reduced the pool of possible buyers for BPCL.
Pradhan also slammed the Organisation of Petroleum Exporting Countries (OPEC) for not keeping its previous commitment and cutting output, which has pushed up oil prices.
“Whatever they had assured, whatever they had projected, whatever they had committed to the global market, OPEC is backtracking on that. That’s our concern,” Pradhan said. “That creates confusion. That creates problems for our economic planning, for our consumer behaviour. That will lead to some kind of inflation.”
OPEC leader Saudi Arabia’s surprise decision recently to cut production by one million barrels has pushed up oil price that’s around $56 a barrel now. Crude oil prices are up around 45% since the beginning of November, pushing domestic rates of petrol and diesel to record levels. The fuel price spike is mounting pressure on the government to cut fuel taxes that are about 60% of the retail prices.