Bharat Petroleum Corp. Ltd (BPCL) has set up a separate platform for its liquefied petroleum gas (LPG) business that runs the centre government’s subsidized domestic cooking gas cylinder scheme in a bid to “ring fence” it, two people aware of the matter told Mint.
“It’s been made clear that whoever will acquire BPCL will have to run the government’s LPG scheme, wherein the government will bear the subsidy burden. They will have to ring fence that business. Within the organization, they will have to keep it separate and a platform and mechanism has been developed for it by BPCL. It will run on it," said a government official, one of the two persons cited above.
Moneycontrol could not independently verify the report.
The government is selling its entire 52.98 percent stake in BPCL for which three expressions of interest (EoIs) including one from billionaire Anil Agarwal-led Vedanta Group have been received. Financial bids are yet to be called.
The acquired government’s stake in BPCL will run a direct benefit scheme namely Pratyaksha Hastaantarit Laabh (PAHAL) and provide government’s subsidy in beneficiaries’ bank accounts. For this purpose, a separate platform has been developed by the company.
The government has disbursed over Rs 7.03 trillion as fuel subsidy since 2011-12. However, the allocation for LPG and natural gas subsidy has been cut down to Rs 12,995 crore for FY22, the report added.
Meanwhile, Fitch Ratings said on September 6 that the uncertainty over the bidder consortiums and process complexity, including valuation, might lead to potential delays in privatisation of BPCL.
Affirming BPCL’s rating at 'BBB-’ with a negative outlook, Fitch said it continues to treat the potential divestment of the company by the Indian government as an event risk.
"Bidders are conducting due diligence, but uncertainty over the bidder consortiums and process complexity, including valuation, may lead to potential delays."
[Inputs from PTI]
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