Divestment Not On The Cards, But Govt Open To Rationalisation, Efficiency Gains For Its Oil Firms

The government of India is open to efficiency gains for its listed oil companies, but is not considering a stake sale at the moment, Petroleum Minister Hardeep Singh Puri said on Friday.

When asked about any plans to cut stake in state-owned oil and gas firms, Puri countered, "As of now, the government has a few oil companies, and all of them are making thousands of crores in profit every quarter,” he said. “Why will we disinvest? To make somebody rich?” he told reporters during a meet in Mumbai.

The ministry is open to some kind of a rationalisation in terms of cross-holdings or some efficiency gains, but a complete stake sale for the purpose of profit is not on the table right now, the energy minister added.

Currently, the government holds over 50% stake in two oil marketing companies — Bharat Petroleum Corp. and Indian Oil Corp. — while also holding more than 50% in oil exploration firm Oil and Natural Gas Corp., through which it also owns over half the stake in Hindustan Petroleum Corp.

In the first quarter of fiscal 2026, BPCL reported a net profit of Rs 6,124 crore, HPCL reported a bottom-line of Rs 4,371 crore, while IOCL's came up to Rs 4,371 crore on a standalone basis. Meanwhile, ONGC's consolidated net profit came up to around Rs 8,024 crore for the same period.

Government representatives also told reporters that state-owned oil firms are seen through a prism of bias. They highlighted apprehensions within investment circles over the possibility of the government not prioritising profitability in order to make fuel prices available at relatively lower rates.

The oil minister highlighted that in the last 11 years of the current government, the focus has been on keeping the oil companies profitable, and making them do a lot of capital expenditure.

"The four years that I have been oil minister, the performance of oil companies has been outstanding. They have been giving large dividends too. Can you beat this?" Puri said, while comparing valuations with listed competitors.

"We are making the profits, giving the dividends, contributing 8% to the GDP, and our valuations are still lower compared to some of our family-owned peers," he highlighted.

IOCL, HPCL and BPCL contributed 3.38% of corporate India's profits last year. Meanwhile, the market value of the three companies put together is less than 1% of listed firms, the head of one of the OMCs highlighted.

Highlighting how this reflects the undervaluation of government-owned oil firms, Puri said, "I want people to realise the dishonesty this reflects."

Now that state-owned petroleum companies are in the process of investing in new businesses like green energy and petrochemicals, Puri also added that he wants the market — the investing community, as he called it — to decide the valuation of these companies.

The minister also addressed the US' concerns on India buying oil from Russia, saying that there are no sanctions on the purchases.

He gave the example of Iran and Venezuela, stating that India has always complied with sanctions as a responsible member of the international community.

As trade negotiations drag on between India and the US, Puri said that Russia is the second largest supplier of crude globally at nearly 10 million barrels a day. He said that any sanctions on Russia will lead to dire global consequences.

"Energy is something you cannot do without. If you remove the second largest producer, you will have to cut consumption," he said, while adding that this is the reason why currently don't see any sanctions being imposed on Russian oil.