India allows ONGC to buy out government stake in refiner HPCL: source

NEW DELHI (Reuters) - India on Wednesday approved a plan to sell the government's stake in state refiner Hindustan Petroleum Corp Ltd (HPCL) to explorer Oil and Natural Gas Corp (ONGC), a source said, in a bid to create oil giants to compete with global rivals.

The Indian government owns 51.1 percent stake in HPCL.

"ONGC has forwarded a proposal to acquire HPCL. Process for in-principle approval for this proposal has been initiated," Oil Minister Dharmendra Pradhan told lawmakers earlier on Wednesday.

(Reporting by Nigam Prusty; Editing by Malini Menon)