BPCL Privatisation Shelved, Says Petroleum Minister Hardeep Singh Puri

The privatisation of BPCL, once touted as India's biggest ever, is now completely off the table, Petroleum and Natural Gas Minister Hardeep Singh Puri said on Tuesday after assuming charge of the ministry for the second time.

"Why would we divest ourselves of highly successful Maharatnas like BPCL?" Puri said, emphasising that the Centre is not in favour of divesting its stake in oil PSUs.

Bharat Petroleum Corporation Limited (BPCL), India's second-largest state oil refining and fuel marketing company, was put up for sale in 2020. The government had planned to sell its entire 52.98 per cent stake in the company and invited expressions of interest from bidders in March 2020.

Mining mogul Anil Agarwal's Vedanta Group and US venture funds Apollo Global Management and I Squared Capital Advisors had expressed interest in buying the government's stake in BPCL.

However, by May 2022, the Centre had formally withdrawn its offer to sell its stake, as only one bidder remained after the other two withdrew due to issues such as a lack of clarity in fuel pricing.

The privatisation effort initially struggled to attract interest due to the volatile global oil price scenario, and later because of uncertainties in domestic fuel pricing.

Public sector fuel retailers, which control 90 per cent of the petrol and diesel market, have been selling fuels at prices below cost. This has forced private sector retailers like Reliance-BP, Rosneft-backed Nayara, and Shell to either sell fuel at a loss or risk losing market share if they raise prices to cover costs.

While the Oil Ministry asserts that oil companies have the freedom to set prices, prices are often put on hold during election periods.