The strategic divestment in Hindustan Petroleum Corporation Ltd is expected to fetch the government at least Rs 8,000 crore (Rs 80 billion).

These estimates were based on the fact that divestment in a smaller company, like IBP Ltd, had yielded the government Rs 1,153 crore (Rs 11.53 billion).

Officials said since the assets of HPCL were much more than those of IBP, it would fetch at least five to six times the price commanded by IBP.

While IBP had 1,500 petrol pumps on April 1, 2002, HPCL had 4,729 outlets. IBP had only 375 kerosene depots all over the country against 1,638 of HPCL.

Regarding liquefied petroleum gas agencies, IBP had 54 and HPCL 1,822. While IBP had no bottling plant of its own, HPCL had 50.

Moreover, while IBP had no refinery of its own in the country, HPCL had around 17.5 million tonnes of refining capacity.

Similarly, while IBP had no pipeline of its own, HPCL had 161 km Mumbai-Pune pipeline and 576 km Vizag-Vijaywada-Sikandrabad pipeline. IBP had no tanking facility of its own, whereas HPCL had 3.4 million kilolitres of such facilities.

The fate of the Bhatinda refinery project of HPCL remains uncertain despite Sunday's decision by the Cabinet Committee on Divestment to implement the project.

While the Cabinet decided to implement the project by either the new management that takes over HPCL after its strategic sale, or by the government, experts are not convinced how it would be achieved.

They said with the country already having an excessive refining capacity, it was unlikely that any bidder would implement the project in a border area like Bhatinda.

On the other hand, the government may not have sufficient funds to implement the Rs 10,000-crore (Rs 100 billion) refinery project.

"Where will the government get funds to build the refinery that may turn sick from day one?" argued an industry expert.

But can the government force the project on the Oil and Natural Gas Corporation or the Indian Oil Corporation as Divestment Minister Arun Shourie suggested at Monday's press briefing?

"Unlikely. With Ram Naik being at the helm of affairs in the petroleum ministry, he will never let the move through," said a senior official.

However, with the government retaining 26 per cent equity and management control over Bharat Petroleum Corporation Ltd even after its public offer, the Bina refinery project can still see the light of the day.

Naik is learnt to have brought forth a proposal before the Cabinet to approve a higher cost of Rs 1,271 crore (Rs 12.71 billion) for the Bina refinery project than the previously approved Rs 549 crore (Rs 5.49 billion).

The Cabinet Committee on Divestment, however, advised Naik to put the proposal before the Cabinet Committee on Economic Affairs.