MPs make political capital from sale of BPCL

Vol 6, PW 21 (18 Dec 02) People & Policy

WHATEVER THE GOVERNMENT decides, it seems unlikely either BPCL or HPCL will come to market before March next year, when the current financial year ends.

"The offer documents must contain audited financial results and we would like to wait till the annual results are declared," said a source at one of these companies. Yet the longer the government waits, the more likely it is the issue will become a political football in the run up to national elections two years from now.

Already, opposition parties are scoring political points by using spurious technical arguments to try to block the sale. For instance Shourie's announcement to MPs was greeted by a curious protest from opposition benches that both oil companies were nationalised by an Act of Parliament and thus selling them would also require an Act of Parliament, a laborious process that could take months if not years to accomplish! Not so, responded the government, which riposted that the Acts do not prohibit the sale of shares in these two companies: three years after the government nationalised Exxon's local arm and Caltex's Vizag refinery to rename them Hindustan Petroleum in 1977, the government sold 48.99% to retail investors leaving 51.01% in government hands.

Likewise with Bharat Petroleum, when the government sold a minority stake in 1992. Argues the government: if it could sell shares then, why can't it sell shares now Expect similar ploys by the opposition and oil unions as the full process gets underway.