BPCL customers to hold on to Indian LPG subsidies

LPG customers of Indian state-controlled refiner Bharat Petroleum (BPCL) will continue to receive the government subsidy on the fuel even after the company's privatisation.

BPCL has 73mn LPG consumers of the total 285mn households using the fuel. It also owns 4.7mn t/yr of LPG bottling capacity. The government does not pay the subsidy to the refiners but directly to consumers, so it does not matter if BPCL is a private-sector or state-controlled company, the country's oil minister Dharmendra Pradhan said, dispelling doubts about the continuation of the subsidy following the planned privatisation.

The government gives 12 subsidised 14.2kg LPG cylinders to a low-income household during a year with the subsidy deposited directly into the bank accounts of users.

India received three bids to buy a 53pc controlling stake in BPCL in a tender that closed last month. India first announced in March that it was looking to sell a controlling stake in BPCL through a tender, in the government's first big move towards opening up the economy through privatisation. Delhi has extended the bidding deadline five times, most recently in September.

By S Dinakar