Hindustan Petroleum gets ONGC's Rs 37,000 crore

ONGC's board of directors approved the proposal for 51.11 per cent share of Hindustan Petroleum in its meeting. Under this, the price will be paid according to Rs 473.97 per share.

New Delhi: There is a relief news for the government 11 days before the budget is presented. Because ONGC has announced to buy more than 51% of the government's stake in Hindustan Petroleum for about Rs 37 thousand crore. In this way Hindustan Petroleum will now be part of ONGC.

ONGC removes crude oil and natural gas in different parts of the country, while Hindustan Petroleum produces petrol and diesel from crude oil and sells it through about 15 thousand petrol pumps. Alongside, Hindustan Petroleum also makes retail sales of petrol and other petrol products besides LPG and air fuel.

ONGC's board of directors approved the proposal for 51.11 per cent share of Hindustan Petroleum in its meeting. Under this, the price will be paid according to Rs 473.97 per share. In this way, ONGC will pay a total of Rs 36,915 crore. On the proposal, a committee headed by Finance Minister Arun Jaitley stamped on Saturday. After this, the way to get 37 thousand crore rupees in the public exchequer was clear.

This news is also important because the income and service tax, which means GST lesser than expected, raised the concern of the government. There was a fear that the loss of government treasury i.e. Fiscal Deficit would be more than the budgetary target of 3.2 per cent. After this, the government suddenly announced an additional surplus of Rs 50,000 crore. But this week, the government clarified that it would make an additional loan of just Rs 20,000 crore instead of Rs 50,000 crore. Now it is clear what has been the reason for reducing additional borrowings.

Role of Mergers In
a review meeting in February 2016, Prime Minister Narendra Modi had emphasized on the efficient management of the Center's investment in government companies. Under this, a proposal for the merger of government companies is ready. In this regard, Finance Minister Arun Jaitley announced the unification of oil companies in the budget of 2017-18. The latest step is part of this proposal.

Once the HPCL is incorporated, ONGC will become an oil company in the country which will be present in every part of the market. The company's capacity will increase and it will be in a position to invest more. Also, the impact of high volatility on crude oil prices can be reduced.

After the fresh decision, the direct stake of the government in Hindustan Petroleum will be over. According to the data till December 31, Hindustan Petroleum had more than 1.83 lakh shareholders in total. Of this, 1.70 lakhs were small shareholders.