Centre seeks authorized opinion to let BPCL promote subsidised LPG after stake sale

Centre seeks authorized opinion to let BPCL promote subsidised LPG after stake sale

A two-decade-old LPG provide order limiting provide of domestically produced LPG to solely state-owned oil corporations has stymied plans to permit Bharat Petroleum Company Ltd (BPCL) to proceed promoting subsidised cooking gasoline (LPG) after its privatisation.

A authorized opinion has now been sought to determine if privatised BPCL might be eligible to obtain liquefied petroleum gasoline (LPG) produced by corporations reminiscent of ONGC and GAIL, two authorities officers with information of the event mentioned.

At the moment, BPCL has greater than 8.4 crore home LPG clients, together with 2.1 crore Ujjwala clients. The corporate doesn’t produce sufficient LPG at its refineries to have the ability to cater to the requirement of all these.

It, like different oil advertising and marketing corporations, buys LPG from state-owned corporations like Oil and Pure Fuel Company (ONGC) and GAIL (India) Ltd in addition to non-public corporations reminiscent of Reliance Industries Ltd.

The Liquefied Petroleum Fuel (Regulation of Provide and Distribution) Order, 2020, referred to as LPG Management Order of 2000, restricts sale of indigenously produced cooking gasoline solely to state-owned oil advertising and marketing corporations Indian Oil Company (IOC), Hindustan Petroleum Company Ltd (HPCL) and BPCL.

It restricts provide of LPG produced by corporations reminiscent of ONGC and GAIL to personal corporations. Personal LPG retailers, known as parallel marketeers, have to make use of imported gasoline for supplying to clients.

The 2000 Management Order was issued because the nation is brief in LPG manufacturing.

As soon as BPCL is privatised, the 2000 order will bar ONGC and GAIL from promoting LPG to BPCL, the officers mentioned.

“Submit divestment of the federal government’s stake in BPCL, it shall stop to be a authorities oil firm when it comes to clause 2(g) of LPG Management Order of 2000,” an official mentioned.

With no entry to indigenously produced LPG, BPCL will not be capable to serve its clients and it will not be attainable to shift the shoppers to IOC and HPCL as LPG cylinder gear at buyer finish will have to be modified. Additionally, IOC and HPCL might not have the required infrastructure to cater to such a big buyer base, the officers mentioned.

As a approach out, it’s being thought-about to proceed to deal with BPCL as a authorities firm for the aim of the 2000 Management Order for 3 years, the officers mentioned including {that a} authorized opinion has been sought to determine if such a transfer is tenable below the legislation.

The opposite different is to amend the LPG Management Order itself to permit non-public corporations to entry indigenously produced LPG. This is able to open up LPG retailing to different non-public corporations.

Officers mentioned legislation ministry opinion has been sought to find out if the time period authorities oil firm within the LPG Management Order mandatory requires the corporate to be a authorities firm and if BPCL publish privatisation will be notified as a authorities oil firm.

To interpret the time period ‘authorities firm’, the opinion of the Ministry of Company Affairs (MCA) in addition to the Ministry of Shopper Affairs (MoCA) has been sought, they mentioned.

MCA as a result of it’s the administrative ministry for functions of administration of the Firms Act, 2013 and MoCA as a result of it’s the administrative ministry/division for the needs of administration of Important Commodities Act, 1955, below which the LPG Management Order of 2000 was issued.

Officers mentioned the brand new proprietor of BPCL will after three years of takeover get a proper to resolve on retaining the enterprise of promoting subsidised LPG.

The agency’s cooking gasoline LPG clients might be transferred to IOC and HPCL in case the brand new proprietor doesn’t need to proceed with such a enterprise, the officers added.

The federal government offers 12 cooking gasoline (LPG) cylinders of 14.2-kg every to households in a 12 months at a subsidised charge. There is no such thing as a subsidy being paid in most components of the nation however a subsidy might be immediately paid into the financial institution accounts of the customers in case costs rise steeply.

The federal government is promoting its whole 53 per cent stake together with administration management in BPCL. The brand new proprietor will get 15.33 per cent of India’s oil refining capability and 22 per cent of the gas advertising and marketing share. It additionally owns 18,652 petrol pumps, 6,166 LPG distributor companies and 61 out of 260 aviation gas stations within the nation.

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