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Asset monetisation: Govt to monetise IOC’s 2 product pipelines, 1 LPG pipeline by FY23, say sources

The government is planning to monetise two product pipelines and one LPG pipeline of state-run oil behemoth IOC by FY23, two separate sources said
Asset monetisation: Govt to monetise IOC’s 2 product pipelines, 1 LPG pipeline by FY23, say sources
Asset monetisation: Govt to monetise IOC’s 2 product pipelines, 1 LPG pipeline by FY23, say sources
  • The move is based on the recommendation made by Niti Aayog, which has suggested monetisation of 4,700-km-long pipelines of IOC and HPCL in the first phase
  • This would be in addition to the monetisation of Hydrogen units at Indian Oil refineries

New Delhi: In line with the announcements made in Budget 2021-22 earlier this year regarding asset monetisation, the government is planning to monetise two product pipelines and one LPG pipeline of state-run oil behemoth Indian Oil Corporation (IOC) by FY23, two separate sources aware of the matter told PSU Watch. The move is based on the recommendation made by Niti Aayog, which has suggested monetisation of 4,700-km-long pipelines of IOC and Hindustan Petroleum Corporation Ltd (HPCL) in the first phase. Sources said that both the oil PSUs have already been asked by the Centre to identify pipelines for privatisation.

This would be in addition to the monetisation of Hydrogen units at Indian Oil refineries. Earlier in May this year, Indian Oil Chairman SM Vaidya had said that the oil marketing company will sell two Hydrogen units at IOC’s Gujarat Refinery, each of capacity 70,000 tonnes.

2,500-Km of pipelines of IOC to be put on sale: Source

One of the sources quoted above said that out of the 4,700 km of pipelines of IOC and HPCL that the government is planning to put on sale, it is likely that this will include 3,500 Km of IOC’s pipelines and 1,200 Km of HPCL’s pipelines. The Centre is also said to have asked the two big state-run oil retailers to identify pipelines operating at 100 percent capacity or close to it as they will fetch a better valuation.

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Indian Oil operates a network of more than 15,000-km-long crude oil, petroleum product and gas pipelines with a throughput capacity of 94.56 million metric tonnes per annum of oil and 21.69 million metric standard cubic meters per day of gas. On the other hand, HPCL operates 3,775 Km of cross-country petroleum product pipelines network. This network comprises of 3,250 km of product pipelines and 356 Km of LPG pipeline.

Background

While presenting Budget 2021-22 in February this year, Finance Minister Nirmala Sitharaman had announced a disinvestment plan and the intention to monetise pipelines of IOC, HPCL and GAIL (India) Ltd, along with other assets created by PSUs. The disinvestment and the asset monetisation plan unveiled by the Centre this year is an expansive plan which will be implemented over the next five years or more and will see the government exiting management control in most PSUs, except for a few in strategic sectors. For FY22, the Department of Investment and Public Asset Management (DIPAM) is aiming to raise Rs 1.75 lakh crore from disinvestment

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