The government is set to show the green light to ONGC disinvestment over the next few days as the petroleum ministry has decided to rework the subsidy sharing formula that will help the state-run explorer improve its earnings. At the same time, the oil and finance ministries have trashed the PSU’s demand for deferring the proposed 5% stake sale till the new gas pricing policy is in place. “Everyone is getting the same price. As and when the new policy is in place, ONGC will also benefit,” said an official. ONGC had petitioned the government, which holds close to 70% stake, that it may not be prudent to lower Centre’s holding in the company without clearing the air on certain policy issues. The move has not gone down well with the finance ministry as it was seen as another attempt by the powerful oil PSUs to block an attempt to share the wealth with a large investor base. During the last financial year, the petroleum ministry had forced the finance ministry to drop plans to sell Indian Oil shares to retail and institutional investors and got other state-run oil companies to buy them.
Based on current share price, the government can raise over Rs 18,500 crore by selling 5% in ONGC, which will be over 40% of the disinvestment target for the current fiscal year.