LPG customers of Bharat Petroleum Corporation Limited (BPCL NSE -1.32 %) will continue to get cooking gas subsidy post-privatisation of the nation’s second-biggest fuel retailers, Oil Minister Dharmendra Pradhan said on Friday. “Subsidy on LPG is paid to consumers directly and not to any company. So the ownership of the company that sells LPG is not of any material consequence,” Pradhan told .
Pradhan said the LPG subsidy payment is done digitally to all verified customers. The government gives 12 cooking gas (LPG) cylinders of 14.2-kg each to households in a year at a subsidised rate. This subsidy is directly paid into the bank accounts of the users. The moment a refill is bought using the subsidy, another installment is transferred into the user bank accounts. The subsidy is paid in advance and consumers use this to buy LPG refills that are available only at market price from dealers of oil marketing companies — Indian Oil Corporation, BPCL, Hindustan Petroleum Corporation Limited.
The government is selling its entire 53 per cent stake along with management control in BPCL. The new owner will get 15.33 per cent of India’s oil refining capacity and 22 per cent of the fuel marketing share. It also owns 17,355 petrol pumps, 6,159 LPG distributor agencies and 61 out of 256 aviation fuel stations in the country. BPCL services 7.3 crore out of 28.5 crore LPG consumers in the country. Privatisation of BPCL is part of plans to raise a record Rs 2.1 lakh crore from disinvestment proceeds in 2020-21 (April 2020 to March 2021).