Indian Oil Giants Eye Rs 5,500 Crore Boost through Petrol Pump License Fee Monetisation

26 Dec 2023 , 02:58 PM

Indian Oil, Bharat Petroleum, and Hindustan Petroleum are considering raising Rs 5,500 crore by securitising license fees from petrol pump dealers, aligning with the government’s asset monetisation push.

Indian Oil targets Rs 2,500 crore, while BPCL and HPCL aim for Rs 1,500 crore each through securitisation of license fees over three years.

The license fee is linked to petrol and diesel volumes sold, settled fortnightly or monthly, ranging from Rs 128 to Rs 369 per kilolitre, with an additional GST of 18-28%.

Discussions on the monetisation plan have taken place between company executives and officials from Niti Aayog, petroleum, and finance ministries.

Companies plan to sell securities to banks or other buyers as part of the monetisation strategy.

Indian Oil, BPCL, and HPCL have not provided comments, but the idea of monetising license fees was discussed last year during financial challenges in the fuel retail sector.

While the plan remains, urgency has diminished as companies are financially strong due to record-high profits in the first half of the fiscal year.

The government has been urging state-run oil companies to monetise assets for new project funding.

A previous plan to transfer pipelines to InvITs and sell minority stakes to raise Rs 17,000 crore did not materialise three years ago, as companies found raising capital from lenders more cost-effective.

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