India’s move to raise the price of subsidised diesel should help with its plans to sell shares in state companies including Oil India Ltd to help bridge the government’s fiscal deficit and gives a boost to private oil refiners looking to enter the market for bulk diesel sales.
New Delhi, which owns about 78 percent of Oil India, is likely to raise more than $500 million by selling 10 percent in the explorer and producer early next month, said sources with direct knowledge of the plan, declining to be named because details are still being worked out.
Raising the diesel price may also help revive a 10 percent stake sale in retailer Indian Oil, which hired six banks in 2010 to prepare for the sale only to shelve the issue as its earnings worsened because of the subsidies.