Decision on Oil India disinvestment deferred

Last Updated: Thu, Jan 24, 2013 15:50 hrs

New Delhi, Jan 24 (IANS) An empowered group of ministers (EGoM) Thursday deferred a decision on the disinvestment of Oil India Ltd. (OIL), according to oil ministry sources here.

The government proposes to divest 10 percent stake in OIL as part of the Rs.30,000-crore disinvestment target for the current fiscal. It is expected to fetch around Rs.2,700 crore at the current market price.

The government holds 78.43 percent of the total issued and paid-up capital of the state-run company. The balance 21.57 percent is held by others.

There has been concern among potential investors about the government's subsidy sharing policy for oil companies.

State-run units OIL, Oil and Natural Gas Commission (ONGC) and GAIL partially bear the subsidy burden for the losses incurred by public sector oil retailers on selling petroleum products at controlled prices.

Oil India shares the burden by selling crude oil and products to the refiners at a discount. It has given subsidy amounting to Rs.25,000 crore from 2003-4 till date.

For the current fiscal, OIL's subsidy load is estimated to be Rs.8,000 crore.

More from Sify: