(FE)
State-run Indian Oil Corporation (IOC) is evaluating the option of throwing its hat in the ring and taking over the entire government stake in fellow oil-refiner-marketer Bharat Petroleum Corporation (BPCL), which tops strategic disinvestment list firmed up for the current fiscal. According to an internal note circulated among IOC top brass which FE has accessed, its marketing division discussed “the issue of taking the government stake in BPCL or the ONGC stake in HPCL by IOC”, in the light of the risks to its business from a possible privatisation of BPCL, at a meeting on October 25.
The note also talks about the “enormous pricing flexibility” that BPCL might enjoy if its new owner turns out to be one with oil major crude oil assets and experience in oil retailing, a scenario which could be to the detriment of IOC’s financials in the short term. IOC has also discussed the eventuality of neither BPCL nor HPCL coming to its fold and strategies to be adopted in such case, such as reducing manpower costs and adopting the joint venture route to expand the retail network.
