Govt disappointed on state-run oil cos' valuations by markets

Mumbai, Sep 26 (PTI) Citing the low valuation given to state-owned oil marketers, Union Minister for Petroleum and Natural Gas Hardeep Singh Puri on Friday expressed the government's disappointment with the investor community.

The government may look at the sale of part ownership in oil companies to increase efficiency, but there is no plan to fully sell any holding right now, Puri said, making it clear that BPCL is not on the block.

The minister said the three oil marketing companies (OMCs), which have collectively reported a profit of Rs 2.5 lakh crore over the last six years, are valued at par with the collective valuation of delivery companies Swiggy and Zomato, which have delivered a loss of Rs 24,000 crore.

"Indian Oil, HPCL, and BPCL (the three OMCs) together constituted 3.3 per cent of corporate India's profit last year. And the market value is less than 1 per cent. So, we believe that we are undervalued," Puri said.

A senior official rued that the state ownership may be leading investors to view such companies through a "prism".

"...there has also been a perception that the government might take away profitability in order to make fuel prices much lower," the official said, adding that all the companies are investing for the future.

The minister clarified that state-owned players in the oil and gas sector enjoy full autonomy, unlike family-run enterprises, where the promoter pushes his or her agenda to the board members.

Government-owned companies also deliver better yields on investment through dividend payouts.

Almost all government-run companies have paid a dividend, Puri said in Mumbai, pointing out that the biggest private sector player does not pay "any dividend".

To a question on OMCs' gross refining margins trailing the numbers reported by Reliance Industries, a senior official from Indian Oil Corporation said there is a difference in how the private sector peer computes the number.

IOCL chairman AS Sahney said all state-run OMCs will start reporting the GRM number using the same methodology used by RIL from the next earnings onwards.

On the issue of under-recoveries by public sector companies on LPG sales, Puri said the companies have got the money back in time without any whining from their executives.

He termed the concerns on ethanol blending as "pure baloney", pointing out that the government does not have any plans to take it beyond the present 20 per cent mixing.

Contrary to some concerns, the ministers said the blending does not impact the mileage or the longevity of the engine. PTI AA BAL BAL