NEW DELHI : The ministry of petroleum and pure fuel has requested state-run oil and fuel corporations to provide you with new plans for asset monetization after the unique plan for monetizing their oil and fuel pipelines by means of infrastructure funding trusts (InvITs) was shelved.
Different choices being checked out embrace monetization of receivables, two officers acquainted with the developments mentioned.
“They’ve been requested to have a look at the methods (of doing so). They’ve been requested to have a look at numerous avenues,” mentioned one of many officers cited above. The federal government has requested the businesses to submit their plans inside 15 days, the official added.
Based on the preliminary plan, the oil and fuel corporations had been prone to switch a few of their pipelines to separate InvITs and promote stakes in these pipelines. Lately, the businesses conveyed to the ministry that the monetization of pipelines by means of InvITs could be an costly manner of elevating capital, following which the federal government agreed to shelve the plan.
Folks within the know mentioned that the businesses conveyed that with excessive credit score scores they’ll elevate capital simply and at a decrease price, which might be helpful in comparison with the returns they must supply InvIT traders.
“For instance, the Nationwide Highways Authority of India has obtained many (street) belongings, nevertheless it doesn’t have that a lot credit score worthiness, so it (monetization by means of InvITs) is best for them, however the identical may not be relevant within the case of refineries. You (oil and fuel corporations) can get loans at aggressive charges and lift cash from the market at fairly aggressive charges,” mentioned one other official.
The official mentioned that there’s a must be inventive when it comes to monetization and elevating extra capital from totally different avenues.
On whether or not the shelving of the pipeline monetization plan would end in decrease restoration or elevating of capital by the gasoline retailers, the officers mentioned that the federal government isn’t revising the targets.
The federal government’s formidable asset monetization plan was introduced in final yr’s Union price range to extend monetary sources for the Nationwide Infrastructure Pipeline. The overall indicative worth of the nationwide monetization pipeline for core belongings of the central authorities has been estimated at ₹6 trillion over the four-year interval of FY22-25.
By way of fuel pipelines, the belongings thought of for monetization throughout FY22-25 embrace pipelines with an mixture size of 8,154 km, of which 7,928 km are from the prevailing operational pipeline belongings and the remainder from pipelines which are anticipated to turn into operational in the course of the interval. The overall worth of pure fuel pipeline belongings thought of for monetization was estimated at ₹24,462 crore, in accordance with NITI Aayog.
A complete of three,930 km of petroleum product and liquefied petroleum fuel (LPG) pipeline had been additionally recognized for monetization throughout FY22-25, of which 3,196 km are product pipeline belongings and 733 km are LPG pipeline belongings. Hindustan Petroleum Corp. Ltd’s (HPCL) Mangalore-Hassan pipeline (LPG pipeline) was recognized for monetization throughout FY23.
The monetization pipeline has been developed by NITI Aayog in session with infrastructure ministries, primarily based on the mandate for asset monetization underneath the Union price range for FY22.
Queries despatched to the ministry of petroleum and pure fuel, HPCL, GAIL and Indian Oil remained unanswered until press time.
The push for other ways to monetize belongings comes at a time the nation’s monetary woes have elevated amid the Russia-Ukraine warfare, and the federal government can be set to lose about ₹1 trillion with the most recent excise responsibility lower on petrol and diesel.
The disinvestment plans of the federal government have additionally encountered hurdles, with the Bharat Petroleum Company Ltd privatization unlikely to happen this fiscal.
Supply: Live Mint