FDI cap in PSU refineries hiked to 49%

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14 FDI proposals worth Rs 826 crore cleared

New Delhi, Mar 12 : Government has issued a formal notification for raising foreign direct investment (FDI) limit in public sector refineries to 49%.

In January, the Cabinet had raised FDI in oil refineries promoted by public sector companies from 26% to 49% , but a formal notification to this effect was issued on Wednesday.

The Department of Industrial Policy and Promotion issued a press note saying, “It has been decided to allow FDI up to 49%, with prior approval of Foreign Investment Promotion Board, in petroleum refining by PSUs without involving any divestment or dilution of domestic equity in the existing PSUs”.

Besides, the condition of compulsory divestment of up to 26% by foreign companies commencing trading and marketing of petroleum products has been deleted.

Government had allowed 100% FDI in actual trading and marketing of petroleum products with a condition that 26% foreign equity would be divested in favour of Indian partner/public within five years.

The biggest beneficiary of the decision would be BG Group of the UK that had been resisting divestment of its stake in Mahanagar Gas Ltd, the company which retails CNG to automobiles in Mumbai.