As the government is considering to fully privatise State-owned fuel retailer Bharat Petroleum Corporation Ltd (BPCL), officials in the finance ministry claim that the government had already repealed the legislation by which the firm was nationalised and therefore, there is no need to now seek Parliament nod before selling it off to private and foreign firms. "The Act (that nationalised BPCL) has been repealed and there is no need for a Parliament approval for the strategic sale of BPCL," said a financial ministry official.
As announced in the budget, the Central government is considering selling most of its 53.3 per cent stake in BPCL to a strategic partner. Last week, a group of secretaries on strategic disinvestment has approved the sale of government’s entire shareholding in BPCL.
However BPCL, which was previously Burmah Shell, was nationalised in 1976 by an Act of Parliament. Burmah Shell, set up in the 1920s, was an alliance between Royal Dutch Shell and Burmah Oil Co and Asiatic Petroleum (India). So, in that case, experts claimed that it will require parliamentary nod to privatise it.
However, officials in the Ministry of Finance claim that the Repealing and Amending Act of 2016 had annulled "187 obsolete and redundant laws lying unnecessarily on the Statue-Book" and this includes the Act of 1976 that had nationalised the erstwhile Burmah Shell.
Earlier, the apex court ruling had stalled the plan to sell 34.1 per cent out of the Centre’s 51.1 per cent stake in Hindustan Petroleum Corporation Ltd (HPCL) to a strategic partner, along with management control. The Supreme Court had in September 2003 ruled that BPCL and HPCL can be privatised only after the Parliament amends a law it had previously passed to nationalise the two firms. The ruling had followed a plan of the then BJP government headed by Atal Bihari Vajpayee to privatise the firms.
BPCL, at the close of market on October 4, had a market capitalisation of about Rs 1.11 lakh crore and a government stake sale could get upwards of Rs 60,000 crore including a control-and-fuel-market-entry premium, officials said.
Privatisation of BPCL will not just shake up the fuel retailing sector long dominated by State-owned firms, but also help meet at least a third of the government’s Rs 1.05 lakh crore disinvestment target.