Reports suggest that the government may restart the process of divesting its stake in Indian Oil Corporation following the considerable rise in the share price of oil companies in recent trading sessions.
In 2010, the government deferred its plan to offload 10 percent (of its 78.92 percent) stake in Indian Oil because of poor market condition.
Following the recent decision by the government to de-regulate diesel pricing partially, the share prices of oil marketing firms and also oil explorers have been rising.
The government is expected to take advantage of the present rally in these stocks and may offload its stake in IOC in the next fiscal year, some analysts feel.
Earlier, the oil ministry had expressed its reservation against minority sale of government’s equity in oil marketing companies because the market did not reflect their true value due to subsidy issues.
Stock prices of companies such as IOC, BPCL and HPCL would jump further if the government resolves subsidy-sharing issues. It is possible after diesel price reforms because main subsidy burden was due to diesel, some analysts feel. Out of the estimated 163,000-crore revenue loss in 2012-13, diesel’s share is over 90,000 crore.
Meanwhile, it may be noted that the government raised the valuation of the 10 percent stake sale in Oil India (OIL), planned this month, by 20 percent to 3,200 crore.
The empowered Group of Ministers (EGoM) is expected to meet soon to finalise the floor price for OIL issue that is planned for January 30.
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