Indian Oil Corporation would realise Rs 13,895 crore (Rs 138.95 billion) if it decides to offload its entire 9.6 per cent equity in Oil and Natural Gas Corporation and 4.83 per cent in GAIL India at Wednesday's opening price on the Bombay Stock Exchange.
This would roughly meet 70 per cent of the gross underrecoveries of the Fortune 500 company for the current year at the international price levels prevailing in the first four months of 2005-06.
According to officials, while the petroleum ministry was agreeable to IOC selling its stake in the two companies, ONGC, which holds 9.11 per cent stake in IOC and 4.83 per cent in GAIL, is not for any such move, neither is GAIL, which holds 2.4 per cent in ONGC.
"The two companies are not in need of funds at the moment though the situation can change later," an official said.
While IOC might look for a way out of the current losses through the sale of its holdings in the two companies, other marketing companies, Bharat Petroleum Corporation, Hindustan Petroleum Corporation and IBP Ltd, cannot resort to any such move, said oil company executives.
Based on the assumption that IndainOil's under-recoveries continued at the first quarter level, it would have a gross under-recovery of Rs 19,472 crore (Rs 194.72 billion) this year.
During the first quarter, IndianOil reported gross under-recoveries of Rs 4,868 crore (Rs 48.68 billion) on the sale of petroleum products below the import parity price.
Oil's not well
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IOC's 9.6% in ONGC, 4.8% in Gail valued at Rs 13,895 crore
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Move to roughly meet 70% of the gross underrecoveries of IOC for the current year at the international price levels
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However, ONGC not inclined to sell 9.11% stake in IOC and 4.83% stake in Gail
- Also, Gail doesn't want to sell its 2.4% stake in ONGC
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