Rapid privatization of BPCL is beneficial for the government

- Aataapakarana Atapata: Dhawal Mehta

- Months have passed since the decision to privatize, but the cock is still confused

The Government of India owns 7.5% stake in BPCL (Bharat Petroleum Corporation). The government wants to sell its majority stake so that the government's dominance in the corporation is less than 50 per cent. This is called disinvestment. The government does not want to sell 100 per cent to BPCL but wants to sell most of its shares to private companies. At current prices, the buyer will have to pay more than Rs 50,000 crore to buy shares to increase its stake in BPCL. Companies like Vedanta, Apollo and Icecare Capital have bid to buy the company's shares. It has been months since the government's decision to disinvest from the company, but a long process is still underway. The government is slow in this regard.

Loss of sales: Government oil-marketing companies are numerous and they sell petrol, diesel and cooking gas. Even though the price of a liter of diesel has reached Rs 6, government oil marketing companies are losing Rs 3 to 4 per liter. For these companies, the government has fixed a price of Rs 2.50 per 15.5 kg domestic cylinder at a loss of Rs 100 per cylinder. Since June 2009, government oil marketing companies have been setting daily prices. Prices of petrol products have skyrocketed. These prices are rising almost daily and Indian consumers are panicking over the rising prices. Rising cooking gas prices have also upset poor families. Although the government subsidizes cooking gas cylinders, it is very high.

Rising prices: Petrol, diesel and gas prices are skyrocketing. The main reason for this is the huge tax on these government products. E.g. On October 1, when a liter of petrol was sold at Rs 101.5, the cost was only Rs 41.5 and when a liter of diesel was sold at Rs 70.15, the price was Rs 4.5 per liter. In short, the government has broken the cadre of its buyers by levying more than 100 per cent tax on petrol and diesel. Not only the central government but also the state governments are responsible for this tax. They have robbed petrol, diesel and cooking gas buyers. The situation is unbearable if more than 100 per cent tax is levied on the total cost. There is provision in the budget for subsidy on petrol and diesel but as there is no provision for subsidy for LPG, the burden of this subsidy falls on the oil marketing companies. Even when the government does not own the controlling shares in BPCL, the partially privatized BPCL Corporation will have to bear the cost of LPG subsidy.

E-cooking: Due to high cooking gas prices, families in Delhi, Tamil Nadu, Telangana, Assam and Kerala have turned away from cooking gas and turned to electric powered appliances. In addition to cooking gas, 15 per cent of households in Delhi and Tamil Nadu and 15 per cent in Telangana have started using e-cooking in addition to cooking gas.