New Delhi: In what may become a u-turn to the government’s plan of selling its entire stake in BPCL for Rs 40,000 crore to Indian Oil corp (IOC), it is learnt that the finance ministry has raised objection on government's stake sale, as it can create a monopoly in the oil marketing business in India.
According to CNBC-TV18 reports, "Ministry of petroleum and natural resources is of the view that IOC should acquire 100% of government’s stake in BPCL but if IOC acquires BPCL, it will lead to IOC becoming a monopoly in the market which may not get clearance from the Competition Commission of India (CCI)". IOC currently has a debt of about Rs 72,000 crore and has a planned capital expenditure plan of about Rs 25,000 crore for the year 2019-20.
The idea of strategic sale of government's stake particularly in BPCL is to offer a stake to a private entity and bring competition in the oil marketing sector which is currently held by big public sector units (PSUs) such as IOC, HPCL and BPCL only.
"Private sector participation in the oil marketing business will come only when a level playing field is offered to private entities. The government feels private sector participation in the sector will ensure scale and efficiency which will lead to cheaper fuel access to consumers at large." said a government official on a condition of anonymity. The government has already given an in-principle nod for strategic sale of 23 PSUs, the report added.