New Delhi: The government is likely to sell 10 per cent of its stake in Indian Oil Corp this fiscal year to raise about Rs 8,150 crore.
The Department of Disinvestment (DoD) has circulated a draft note for the consideration of the Cabinet Committee on Economic Affairs (CCEA) for sale of 10 per cent out of government's 68.57 per cent stake in Indian Oil, sources privy to the development said.
It sought comments on the proposal from Petroleum Ministry as well as Departments of Expenditure, Public Enterprises and Economic Affairs. Comments of the Law Ministry and Ministry of Corporate Affairs too were sought.
At current price, the government will get no more than Rs 15,000 crore. In 2014-15, the government has sold a 5 per cent stake in steel major SAIL to garner Rs 1,700 crore. It is racing against time to meet its disinvestment target of Rs 43,425 crore for this fiscal year. Blue-chip companies like ONGC, NHPC and Coal India had been lined up for disinvestment.
Sources said disinvestment in ONGC too can happen provided the government is able to rework the subsidy sharing formula.
The Oil Ministry wants the payout by ONGC and other upstream producers like OIL for subsidising LPG and kerosene to be reduced to the extent of the statutory oil cess they pay to the government.
According to a new subsidy sharing formula, the payout is to be reduced to the extent of Rs 4,500 per tonne oil development cess they pay to the government. The cess in current fiscal year will total Rs 10,500 crore.
ONGC and OIL have already paid Rs 31,926 crore in fuel subsidy in the first half and if the ministry's proposal is accepted, their payout in remainder of the current fiscal year will be no more than Rs 8,000 crore.
Upstream producers like ONGC met nearly half of the revenue loss, or under-recoveries that fuel retailers incurred on selling cooking fuel and diesel until recently at government controlled rates.
This dole, which was in the form of deep discounts on oil ONGC sold to refineries, had strained its balance sheet as its net realisation fell below the economic cost of oil.