Bharat Petroleum Corporation Ltd (BPCL) has not yet received any official communication from the government on its plan to sell its 53.3% stake in public sector oil marketing company, N Vijayagopal, director (finance) said on Friday.

"The decision to privatise has to be taken at the level of the Cabinet Committee of Economic Affairs and, as far as I know, that is yet to happen," Vijayagopal told reporters here. "The company has not changed any business decisions in anticipation of the stake sale. If the government decides to sell its stake, we (management of BPCL) will be part of the process."

On 20 October, Mint reported that Saudi Aramco, Rosneft, Kuwait Petroleum, ExxonMobil, Shell, Total SA and Abu Dhabi National Oil Company have had conversations with the government on bidding for the latter's stake in BPCL. A core group of secretaries on divestment approved the privatization of BPCL on September 30, while the Department of Investment and Public Asset Management is in the process of appointing a transaction advisor, legal advisor and an asset valuer.

Meanwhile, BPCL is seeing a decline in its diesel sales in line with other oil marketing companies, reflecting the widespread economic slowdown in India. The domestic diesel market, a key petroleum product used widely in the hinterland and supported by government subsidies, shrunk by 2.5% in the September quarter. BPCL's diesel sales fell by 2.4%, while petrol sales rose 6.7%.

For the first time, BPCL exported 200,000 tonne diesel in September with sales falling in the domestic market.

"In October, we expected diesel sales to pick up because of the festive season but growth was negative again," Vijayagopal said. "We don't anticipate that diesel sales will pick up overnight."

He said the company has decided to invite tenders for term contracts for diesel exports up to March 2020 and will sell 3-4 parcels of 200,000 tonnes each per month. Diesel exports are expected to be higher starting Q3 even as the domestic market lags.

BPCL reported a net profit of ₹1709 crore in the September quarter, up 40% from the year-ago period. The gross refining margins - the weighted average difference between the cost of crude oil and realisations from sales of refined products - stood at $3.38 a barrel, compared to $5.57 a barrel in the year-ago period.

Total revenue decreased from ₹82,924 crore to ₹75,056 crore even as operating profit (EBITDA) rose to ₹3246 crore in the September quarter. The company has completed ₹4030 crore of its ₹7950 crore capital expenditure target for the fiscal and has planned capital expenditure of ₹12,000 crore for FY21.

BPCL commissioned 274 retail outlets in Q2FY20, taking its total to 15,177 outlets. The company said it is focusing its retail expansion in rural markets in eastern India where demand for petroleum products is growing the fastest. "We now have a 15% market share in rural sales and we want to increase this to 24-25% in 4 years," Vijayagopal said. The company aims to open 1000-1500 new outlets every year for the next 3-4 years.


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