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Indian Oil Corporation Ltd's ratings are not affected by the government's reduction of its stake in the company to 58% from 68%, said Fitch Ratings, a ratings agency.
"The other two smaller state-controlled oil refining and marketing companies - Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited - have historically had lower state ownership at 55% and 51%, respectively," said Fitch Ratings.
The ratings of the three public-sector oil refining and marketing companies are equalised with that of the state in line with Fitch's Parent-Subsidiary Criteria. Fitch believes that the state continues to have close operating and strategic linkages with these entities despite the recent reforms to fuel prices and subsidy schemes. "We believe these three companies will continue to be important policy tools that the state will use to meet socio-economic objectives when required," the agency said.
The Indian government's diesel price deregulation in October 2014 took place after a substantial drop in global oil prices; the government's resolve to maintain its current approach to petroleum product pricing and subsidies in an environment of high crude prices is yet to be tested.
