Share a new plan to monetise assets within 15 days: Govt tells oil PSUs

The govt has asked state-run oil and gas cos to share a new plan for asset monetisation after the original plan to monetise pipelines through infrastructure investment trusts (InvITs) was shelved

The government has asked public sector oil and gas companies to share a new plan for asset monetisation after the original plan to monetise oil and gas pipelines through infrastructure investment trusts (InvITs) was shelved. The government has asked the companies to share the plan within 15 days, reports Mint.

As per the previous plan, the oil and gas PSUs were likely to transfer some of their pipelines to separate InvITs and sell stakes in those pipelines. 

The oil companies have told the government that their high credit ratings, among the best in the country, will allow them to raise capital easily and at a much lower cost than any return they would have to offer InvIT investors.

"For example, the National Highways Authority of India has many (road) assets, but it does not have that much credit worthiness, so it is better for them, but the same might not be applicable in the case of refineries. You (oil and gas companies) can get loans at competitive rates and raise money from the market at quite competitive rates," Mint quoted an official.

The asset monetisation programme, announced in Budget 2021, is a pipeline of assets the government is looking to monetise to collect about Rs 6 trillion to partly fund its ambitious infrastructure projects over four years ending 2024-25.

Finance Minister Nirmala Sitharaman, while announcing the plan, said it's vital that India recognises the time has come for making the most out of our assets.

The plan includes petroleum product pipelines of 3,930 km to be monetised by Indian Oil Corporation, Hindustan Petroleum Corporation and the Ministry of Petroleum and Natural Gas.

In terms of gas pipelines, the assets considered for monetisation during FY22-25 include oil and gas pipelines with an aggregate length of 8,154 km, of which 7,928 km are from the existing operational pipeline assets and the rest from pipelines that are expected to become operational during the period. The total value of natural gas pipeline assets considered for monetisation was estimated at Rs 24,462 crore, according to NITI Aayog.