Energy transition to cost state oil firms more as govt set to slash support pack

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Indian Oil Corp. and Bharat Petroleum Corp. Ltd., both under government control, had initially planned rights issues to raise up to 220 billion rupees and 180 billion rupees, respectively, with government backing.

Also read: FII-backed penny stock under ₹10 hits 52-week high. Gives 85% return in six months However, these figures could now be reduced by up to 50%, according to individuals familiar with the matter who preferred to remain anonymous as the plan has not been made public. The adjustment comes as part of Prime Minister Narendra Modi's government efforts to target a fiscal deficit of 5.9% of GDP in the current fiscal year, down from 6.4% in the previous year.

Despite the likelihood of surpassing tax revenue projections, there are expected shortfalls in other areas, including proceeds from the sale of shares in state-owned entities. As of now, New Delhi has only raised 100.5 billion rupees from share sales, falling short of the 510 billion rupees goal. Also read: Multibagger Stock: Reliance Power shares hit 52-week high, up 900% in 3 years; should investors consider buying? The 2023-24 budget allocated 350 billion rupees for "priority capital investments towards energy transition and net-zero objectives, and energy security." Of this, 300 billion rupees were earmarked for state-owned fuel retailers, with the remainder designated for strategic petroleum reserves.

There has been no immediate response from spokespeople at Indian Oil and Bharat Petroleum, and the finance ministry did not respond to an email seeking comment. The refiners have yet to receive formal notification from the government regarding the reduced rights issues, according to one source. Another source indicated that the companies are adequately