The Union cabinet meeting on Thursday is slated to discuss raising the ceilingon foreign direct investment (FDI) in the oil refining sector to 49% from the current 26%.
A hike in the FDI limit will allow steel baron Lakshmi Mittal to go ahead with the purchase of a 49% stake in the $4.6 billion (Rs18,860 crore) Bhatinda refinery, which is being set up by state-owned refiner Hindustan Petroleum Corp. Ltd (HPCL).
“It is coming up for cabinet (approval) tomorrow (Thursday),” oil secretary M.S. Srinivasan said at an industry meeting on Wednesday.
The Bhatinda refinery has a capacity of 180,000 barrels of crude per day.
Mittal’s proposal to buy a 49% stake in the Bhatinda refinery was discussed at the last meeting of the Foreign Investment Promotion Board (FIPB) held earlier in the month. FIPB deferred a decision on the proposal as the prevailing guidelines do not allow for a stake above 26%, said a senior finance ministry official who did not wish to be identified.
Srinivasan also said that the oil ministry would seek cabinet approval for the sale of a 10% stake in state-run explorer Oil India Ltd (OIL) by the end of July. OIL is the only major state-run company under the ministry that has not been listed on the bourses.
Reuters contributed to this story.