In the short term, the government is poised to make big revenue gains in the energy sector through the twin trajectories of BPCL disinvestment and auction of coal mines to private sector companies.
BPCL disinvestment which was announced in November 2019, has finally taken off with the government receiving EoIs from companies this month. The government’s entire shareholding of 52.98 per cent in BPCL is up for sale. BPCL’s shareholding of 61.65 pc in Numaligarh Refinery is excluded from the process and will be transferred to a CPSU operating in the oil and gas sector. Since BPCL is a listed company, the successful bidder will be mandated by Sebi regulations to acquire another 26 pc through the open offer route.
Big ticket disinvestment which was established on a sound economic footing as a customary economic standard by NDA-I led by the Vajpayee government is making a comeback with BPCL disinvestment. After a gap of several years we are seeing such daring ambition.
BPCL company has mammoth assets, operations and many subsidiaries. It has 38.3 mmtpa refining capacity, a strong network of about 15,000 retail outlets, a robust supply chain of retail depots, installations and thousands of kilometres of product pipelines across India. An important player in the LPG market, BPCL has 52 LPG bottling plants, 5,907 distributors and serves 8.1 crore domestic customers. It forayed into gas business with a jv in IGL and has grown this business via its own rollouts and with various partnerships. BPCL has an upstream subsidiary which has participating interest in 25 blocks in 8 countries. Besides, it has an array of business units and associated infrastructure.
Meanwhile, centre alongwith state governments will reap a good revenue harvest from the successful auction of 19 coal blocks and is expected to fetch over Rs 1 lakh crore in revenue share from private companies. This is over and above the green cess and other levies that are applicable. A total of 38 mines were put on auction, 15 could not find any buyers. The commercial mining story gives complete details of the auction.
Opening the sector to private company miners became a compelling need with an ever rising import bill. The country imported 251 MT of coal, about 26 pc of its total requirement in 2019-20. Around 135 MT of imported coal valued at Rs 171,000 crore could have been met from domestic coal, is the thinking in government and a part of PM Modi’s Atmanirbhar Bharat push.
