New Delhi, Oct 06: India's largest firm Indian Oil Corporation's 4,800 petrol pumps may be sold to Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd if ministry of disinvestment's proposal to hive-off the fortune 500 firm's retail arm goes through. To push forward disinvestment process in oil sector after the Supreme Court halted privatisation of HPCL and BPCL, the disinvestment ministry, at last week's CCD meeting, suggested that IOC's retailing and refining business could be split into separate entities and 60 per cent of its retail business be sold to HPCL and BPCL, highly placed sources said.

To counter the split, petroleum ministry is working on a cabinet note for selling government's 20 per cent equity in IOC in the capital market to fetch about Rs 8000 crore.

Sources said that Disinvestment Minister Arun Shourie suggested that IOC's 4800 petrol stations out of a total of 8034 outlets be sold equally to HPCL and BPCL to realise close to Rs 5000-6000 crore.
IOC, besides retaining 10 refineries with a total capacity of 49.3 mn tonnes and pipelines business, would retain remaining 3234 petrol stations. It would also continue to hold petrol retailer IBP Co Ltd, which has 2079 stations.
Another proposal being contemplated is selling 26 per cent equity in unsplit IOC to a strategic partner and another 5-6 per cent to public to bring down government holding to 51 per cent.
Disinvestment ministry's proposal of splitting IOC or selling stake to strategic partner are likely to face stiff opposition from Petroleum Minister Ram Naik who wants the flagship retailer under government control.

Bureau Report