Seven bids submitted for government's share of Indian fuel retailer

Seven bids apparently were submitted for a 33.6% interest in Indian fuel retailer IBP Co. currently held by the government.

Feb. 1, 2002

2 min read

By the OGJ Online Staff

LONDON, Feb. 1 -- Seven bids apparently were submitted for a 33.6% interest in Indian fuel retailer IBP Co. currently held by the government.

The government, which has 59% of IBP, hoped to raise $88 million from sale of the 33.6% stake.

Reliance Industries Ltd., India's biggest private company, submitted two bids while Royal Dutch/Shell Group, Kuwait Petroleum Corp., and Kuwait Indian Oil Corp. each submitted a bid. Hindustan Petroleum Corp. and Bharat Petroleum Corp., which are both state-owned, also bid.

India plans to raise $2 billion in the fiscal year ending in March by asset sales such as government holdings in IBP and the telecoms company Videsh Sanchar Nigam Ltd., to help fill a budget deficit expected to be $24 billion. So far, it has raised just over $41 million.

The IBP sale is seen as a test of the government's resolve to push ahead with the sale of assets after it failed to attract buyers for companies such as national carrier Air India Ltd. and domestic airline Indian Airlines Ltd.

The sale offers Reliance and Shell the opportunity to break into India's fuel retail market, currently limited to state-owned refiners. IBP runs more than 1,500 gas stations with 7% of the market.

The sale is part of a plan to deregulate the country's $65 billion fuel industry. In 1997, the government promised to end its fuel supply monopoly, stop setting prices, and cut subsidies on kerosene and cooking gas by this Apr. 1.