Page 148 - CW E-Magazine (2-1-2024)

Hydrocarbons

ASSET MONETISATION
IOC, BPCL and HPCL keen on securitising licence fee

Indian Oil Corporation (IOC), ume of petrol and diesel sold at a pump to record-high profi ts in the fi rst half of
Bharat Petroleum Corporation Ltd. and is settled between a dealer and the the current fi scal year.
(BPCL) and Hindustan Petroleum Cor- company each fortnight or month. The
poration Ltd. (HPCL) are reportedly licence fee for diesel and petrol varies The government has been pushing
discussing plans to raise Rs. 5,500-crore from Rs. 128 per kilolitre to Rs. 369 State-run oil companies for years to
by securitising the licence fee they get per kilolitre based on the location of monetise their assets to raise resources
from their petrol pump dealers as part the petrol pump. A goods and services that can be deployed in new projects.
of the government’s push for asset tax (GST) of 18-28% also applies to the
monetisation by state companies. licence fee. Three years ago, the government
had drawn up a plan, which expected
IOC is targeting to raise Rs. The idea of monetising licence fees state oil and gas companies to trans-
2,500-crore, while BPCL and HPCL was fi rst discussed last year when fuel fer some of their pipelines to InvITs
are aiming for Rs. 1,500-crore each by retailers were making losses follow- (Infrastructure Investment Trusts) and
securitising the licence fee for three ing a spike in international fuel prices sell minority stakes in those to raise
years and selling the securities to banks and were looking to raise cash through Rs. 17,000-crore. The plan didn’t take
or other buyers, according to the com- innovative means. While the plan to off as the companies said they could
panies’ plans. monetise licence fees is on the table, raise capital from lenders at a much
the urgency to execute it has reduced as lower cost than the return they may
The licence fee is linked to the vol- companies are now fl ush with cash due have to offer to InvIT investors.

EXPANSION
IGX plans to introduce LNG contracts to boost distri-

bution in unconnected areas

Indian Gas Exchange (IGX) is
planning to offer liquefi ed natural gas
(LNG) contracts on its platform, which
will benefi t buyers in areas not connec-
ted by pipelines, according to its CEO,
Mr. Rajesh Mediratta.

IGX, the country’s only physical
delivery-based gas exchange launched
three years ago, currently offers only
natural gas contracts. In November
2023, 6.7-mmscmd of gas was traded
on IGX, a fraction of the 178-mmscmd
consumed in the country. About three- trading, Mr. Mediratta said. It plans to ing around 0.4% of the country’s total
fourths of the gas traded on IGX is launch this at Dahej, Dabhol, Hazira, natural gas consumption, IGX said,
the locally produced volume subject and Ennore terminals from where adding that it was expected to grow to
to a government-set price ceiling. The imported LNG can be taken in tankers 5-mmscmd over the next fi ve years.
balance is mostly regasifed LNG. for distribution to customers in areas
not connected to the gas pipelines. IGX has six regional hubs and
IGX is now seeking a nod from the multiple delivery points. It offers six
Petroleum and Natural Gas Regula- About 0.7-mmscmd of LNG is contracts, ranging from day-ahead to
tory Board (PNGRB) to launch LNG transported by road in India, constitut- monthly.

148 Chemical Weekly January 2, 2024

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