Winning bidder for BPCL can bank on its revenue to recover the cost of acquisition
Published On: Tuesday, November 24, 2020 | By: Team KnowMyStock
The crunch in tax revenues as a result of the pandemic has made privatisation an imperative rather than just a strategy for the Narendra Modi government. At the forefront of this move are Bharat Petroleum Corporation Ltd (BPCL) and Air India. Unlike the latter, the oil refining and marketing major is a revenue churner for the government rather than a drain on its finances. Nonetheless, the Union finance ministry’s silence around the submission of expressions of interest (EoIs) for BPCL casts doubts on whether the interested parties are good enough for handing over a public jewel.
successfully biding by any player presently in the field for BPCL, is bound to change the dynamics of the market for Indian Oil Corporation, Hindustan Petroleum Corporation and Mangalore Refinery & Petrochemicals (MRPL) and even for private players RIL and Nayara Energy. This is so because BPCL, on its own has 36 million tonne refining capacity — excluding the Numaligarh Refinery which is expected to go through a separate sale to a public sector undertaking. BPCL’s refineries in Kochi and Bina give access to hinterland which is not catered to by any other player. Besides, BPCL has 16,492 retail outlets and 72 million LPG customers making it a prized asset for any new player.
Tags: privatisation of BPCL
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