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New Delhi, Oct. 20: The divestment of a 5 per cent stake in state-owned ONGC is likely to take place in the first week of November and can fetch the government Rs 18,000 crore.
The disinvestment secretary today held a meeting with merchant bankers to chalk out the plan.
Officials said the government’s decision on gas price and diesel decontrol made this “the right time to divest”.
They said ONGC’s concerns regarding the subsidy-sharing mechanism would be sorted out by this month so that investors would have clarity on the issue.
Chairman and managing director Dinesh K. Sarraf said the decision would help the company to monetise some of its small and marginal gas discoveries.
“Every $1 rise in gas price increases our revenues by Rs 4,000 crore and net profit by Rs 2,350 crore.” he said.
“The investor sentiments in the domestic upstream sector will improve. Nonetheless, the lack of clarity on the quantum of price premium for gas produced from complex offshore blocks is a dampener, especially considering that most of the domestic prospects fall in this category,” rating agency Icra said.
The government had last sold a 5 per cent stake in ONGC in 2012 for Rs 14,000 crore. The Centre plans to mop up Rs 43,425 crore by selling stakes in various state-owned companies this fiscal.
LPG subsidy
Oil minister Dharmendra Pradhan said the relaunched cash transfer scheme for LPG would help to save Rs 10,000 crore in subsidy.
The cabinet decided to relaunch a modified version of the direct benefit transfer (DBT) scheme of the previous UPA government. Under the scheme, cash subsidy is transferred to the bank accounts of LPG users so that they can buy cooking gas cylinders at market price.
Pradhan said direct transfers would help to check the diversion of subsidised cooking gas to unintended users.
“It is a way to reduce subsidy (burden)... Rs 10,000 crore in LPG subsidy can be saved,” he said. The scheme will be launched on a full-scale basis by the last quarter of this fiscal.
NTPC view
NTPC said the gas price hike would be beneficial only if the power distribution companies bought the costly electricity from generating companies.
“I hope with this the gas producers will increase production but ultimately it will work when schedule is given by discoms for this (costlier) power,” NTPC chairman Arup Roy Choudhury said today.