Foreign companies also willing to buy government stake
Till now 49 per cent FDI is allowed in public sector oil refinery companies. Bharat Petroleum Corporation Limited could not be sold to any foreign company if this limit of foreign investment remained in place. Three companies have given initial letters of interest to buy the government’s entire 52.98 percent stake in BPCL. Two of these are foreign companies. An official clarified that the increased FDI limit is only for matters related to disinvestment. The FDI limit in oil refineries promoted by public sector undertakings will remain at 49 per cent. This limit was fixed in March 2008.
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Indian Oil Corporation is under the control of the Central Government.
In March 2008, the central government had raised the FDI limit in PSU-promoted oil refineries from 26 per cent to 49 per cent. At present, the government is only selling stake in BPCL. The country’s largest and second oil refinery and marketing company Indian Oil Corporation (IOC) is under the control of the Central Government. At the same time, Hindustan Petroleum Corporation Limited (HPCL) is now a subsidiary of Oil and Natural Gas Corporation (ONGC).
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The central government has decided to sell its entire stake in BPCL to a private company. This is part of the government’s asset monetization scheme. The private company that buys it will have refining and marketing assets as well as exploration assets.
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