Centre seeks legal opinion to let BPCL sell subsidised LPG after stake sale

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

A authorized opinion has now been sought to establish if privatised BPCL shall be eligible to obtain liquefied petroleum fuel (LPG) produced by firms resembling ONGC and GAIL, two authorities officers with data of the event stated.

At present, BPCL has greater than 8.four crore home LPG prospects, together with 2.1 crore Ujjwala prospects. 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 firms, buys LPG from state-owned corporations like Oil and Pure Gasoline Company (ONGC) and GAIL (India) Ltd in addition to non-public firms resembling Reliance Industries Ltd.

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

It restricts provide of LPG produced by corporations resembling ONGC and GAIL to non-public corporations. Non-public LPG retailers, referred to as parallel marketeers, have to make use of imported fuel for supplying to prospects.

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 stated.

“Publish 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 stated.

With no entry to indigenously produced LPG, BPCL will not be capable of serve its prospects and it might not be potential to shift the shoppers to IOC and HPCL as LPG cylinder tools 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 stated.

As a method out, it’s being thought of to proceed to deal with BPCL as a authorities firm for the aim of the 2000 Management Order for 3 years, the officers stated including {that a} authorized opinion has been sought to establish if such a transfer is tenable beneath the regulation.

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

Officers stated regulation ministry opinion has been sought to find out if the time period authorities oil firm within the LPG Management Order essential requires the corporate to be a authorities firm and if BPCL put up privatisation might 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 stated.

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, beneath which the LPG Management Order of 2000 was issued.

Officers stated 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 fuel LPG prospects shall 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 provides 12 cooking fuel (LPG) cylinders of 14.2-kg every to households in a 12 months at a subsidised charge. There isn’t a subsidy being paid in most elements of the nation however a subsidy shall be immediately paid into the financial institution accounts of the customers in case costs rise steeply.

The federal government is promoting its total 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 businesses and 61 out of 260 aviation gas stations within the nation.

This story has been printed from a wire company feed with out modifications to the textual content. Solely the headline has been modified.

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