Decks Cleared For BPCL Privatisation As Union Govt Amends Rule To Allow 100% FDI In Oil PSUs Approved For Disinvestment

The Union government on Thursday (Jul 29) permitted 100 percent foreign investment under the automatic route in oil and gas PSUs which have received in-principle approval for strategic disinvestment.

""Foreign investment up to 100 percent under the automatic route is allowed in case an 'in-principle' approval for strategic disinvestment of a PSU has been granted by the government," a press note by Department for Promotion of Industry and Internal Trade (DPIIT) said.

The decision regarding this was taken by the Union Cabinet last week.

Two out of the three companies that have put in an initial expression of interest (EoI) for buying out the government's entire 52.98 percent stake in BPCL are foreign entities. The market value of the Centre’s 52.98% stake in BPCL is worth a little over Rs 52,000 crore at the current market prices.

The FDI limit in PSU-promoted oil refineries will continue at 49 percent — a limit that was set in March 2008.

Speaking at a virtual conference organised by industry body Ficci, department of investment and public asset management (Dipam) secretary Tuhin Kanta Pandey said that the union government was trying to conclude the planned big-ticket disinvestments, including privatisation of fuel retailer-cum-refiner BPCL and listing of insurance behemoth LIC in the current financial year.