Sell 15% of ONGC, IOC, says Naik

The petroleum ministry is likely to propose to the Cabinet a sale of up to 15 per cent of the government's equity in Indian Oil Corporation (IOC) and Oil and Natural Gas Corporation (ONGC) in the capital market to net Rs 10,000 crore for shoring up state finances.

Taking note of the buoyant stock market, the ministry is of the opinion that this is the right time to offload a part of the government's stake in the two corporations to reach closer to the finance ministry's target of generating Rs 13,500 crore revenue through disinvestment in PSUs.

The ministry is of the opinion that in case the government wishes to raise more resources, it can offload a part of its equity in Gail India Limited as well.

Petroleum ministry officials say this option has an advantage in that since the government holds more than 80 per cent equity in IOC and ONGC, a 15 per cent disinvestment would not change its ownership pattern and both the companies would remain under government control.

The petroleum ministry's proposal would be in addition to the three options the government is exploring in the wake of the Supreme Court halting privatisation of Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited.

At its October 3 meeting, the Cabinet Committee on Disinvestment had decided to explore the possibility of approaching Parliament for approval of HPCL and BPCL disinvestment as suggested by the apex court, seeking a review of the judgment, and see if IOC can be disinvested.

The petroleum ministry is preparing a discussion paper on the third option of IOC disinvestment which will be submitted to the disinvestment ministry by the end of the month.

Simultaneously, the petroleum ministry is expected to prepare a Cabinet note on its latest proposal for offloading upto 15 per cent government equity in IOC and ONGC in the market.