New Delhi: Bharat Petroleum Corporation Ltd (BPCL) has created a separate platform for its cooking gas operations so that it could function uninterrupted with the government transferring subsidies to consumers even after the privatisation of the BPCL.
The separate platform was mandated as part of the sell-off process to ring-fence the new owners from the government's subsidised LPG cylinder scheme where the subsidy amount is transferred directly into the accounts of consumers.
The government is selling its entire 52.97 per cent shareholding in BPCL to a strategic investor.
It has now been decided that cooking gas customers will continue receiving subsidies into their bank accounts post-privatisation of PSU oil refiner.
The government has clarified that the present system where the oil companies pay the subsidy amount and the government reimbursed such payments would continue.
The creation of a separate platform would help keep subsidised cooking gas operations separate. This will allow identification of beneficiaries and transfer of subsidy without the scheme creating confusion for new owners.
The LPG price for cooking for consumers under PAHAL is subsidized by the government wherein the subsidy quantum given to the PAHAL (Pratyaksha Hastaantarit Laabh) consumers by way of DBT, is the difference between the market-determined price and the subsidized price.
Private oil companies such as Reliance, Nayara Energy do not get any subsidy support from the government for cooking gas. So if these companies were to sell domestic LPG cylinders, it would be priced at market rates.
The government has allocated Rs 12,995 crore as petroleum subsidy for FY-22, a drastic cut over Rs 40,000 crore provided in the previous year.
With regard to BPCL, the government hopes to invite price bids from prospective investors soon. Besides Vedanta Group, two American funds - Apollo Global and I Squared Capital - have submitted their expressions of interest (EoI) for BPCL.