With just one bidder left, BPCL privatisation stalled

PTI

New Delhi, May 18

Privatisation of BPCL, which was dubbed India’s biggest ever, has been stalled with just one bidder left in the fray after two others walked out over issues such as lack of clarity on fuel pricing, a top source said.

The government had planned to sell its entire 52.98% stake in Bharat Petroleum Corporation Ltd (BPCL) and invited Expression of Interest from bidders in March 2020. At least three bids came in by November 2020 but only one remains now after the others withdrew from the race.

Lack of clarity on fuel pricing to blame

• The government had planned to sell its entire 52.98% stake in BPCL
• At least three bids came in by November 2020 but now two bidders are out of the race
• Vedanta Group and US venture funds Apollo Global Management Inc and I Squared Capital Advisors had expressed interest in buying the government’s stake

“We are in a single bidder situation and it doesn’t make sense that the single bidder dictates the narrative. So the disinvestment process is stalled for now,” the source, who wished not to be identified, said.

The privatisation of India’s second-largest state oil refining and fuel marketing company had not attracted much interest first due to the volatile global oil price scenario and later due to a lack of clarity in domestic fuel pricing.

Public sector fuel retailers, which control 90% of the petrol and diesel market, sell petrol and diesel at prices below the cost. This has forced private sector retailers such as Reliance-bp, Rosneft-backed Nayara and Shell into a situation where they either sell fuel at losses or lose market in case they raise prices to the level of cost.

Mining mogul Anil Agarwal’s Vedanta Group and US venture funds Apollo Global Management Inc and I Squared Capital Advisors had expressed interest in buying the government’s 53% stake in BPCL.

But the two funds withdrew after failing to rope in global investors amid waning interest in fossil fuels.

The government has not made any formal statement on withdrawing the stake sale of BPCL.

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