The Central Government has ruled out any discount to oil PSUs, saying it will sell all the four standalone refineries to Indian Oil (IOC) and Bharat Petroleum (BPCL) at the current market price before taking up disinvestment in the oil sector.

"The price of the four standalone refineries will be determined by the petroleum companies in consultation with Finance Ministry and a financial consultant...any disinvestment in IOC will be taken only after this exercise," Petroleum Minister Ram Naik said.

Mr. Naik said Government would sell its stake in Cochin Refinery (CRL) and Numaligarh Refinery (NRL) to BPCL while Bongaigaon Refinery (BRPL) and Madras Refinery (MRL) stake would go to IOC over the next few months. He clarified that the Cabinet would soon decide whether to merge the standalone refineries with the two marketing giants or structure these as subsidiaries of IOC and BPCL.

As per a Cabinet note circulated by Petroleum Ministry recently, it has been proposed to make BRPL and MRL as subsidiaries of IOC while merging CRL with BPCL. The proposal also includes selling the 19 per cent stake of IBP in Numaligarh refinery to BPCL, sources said. "This restructuring itself will go a long way in helping the Government to achieve the disinvestment target of Rs. 10,000 crore in the current financial year," Mr. Naik said.

Petroleum Ministry is also working out various options for divesting its stake in IBP, including auctioning 2000 retail outlets of the standalone marketing company and has managed to get assurance from CCD that Government equity in three national oil companies would not come below 51 per cent. "To realise maximum price of disinvestment in IBP, we are working out various options like auctioning 2000 retail outlets of the company or merging them with any other marketing PSUs," Mr. Naik said.

The CCD, at its recent meeting while approving disinvestment in IBP, had also said that Indian Oil Corporation, Oil and Natural Gas Corporation and Gas Authority of India Ltd would be treated as flagship companies and Government equity in them would not come below 51 per cent, the Minister said.