Government representatives also told reporters that state-owned oil firms are seen through a prism of bias. They highlighted apprehensions within investment circles over the possibility of the government not prioritising profitability in order to make fuel prices available at relatively lower rates.
The oil minister highlighted that in the last 11 years of the current government, the focus has been on keeping the oil companies profitable, and making them do a lot of capital expenditure.
“The four years that I have been oil minister, the performance of oil companies has been outstanding. They have been giving large dividends too. Can you beat this?” Puri said, while comparing valuations with listed competitors.
“We are making the profits, giving the dividends, contributing 8% to the GDP, and our valuations are still lower compared to some of our family-owned peers,” he highlighted.
IOCL, HPCL and BPCL contributed 3.38% of corporate India’s profits last year. Meanwhile, the market value of the three companies put together is less than 1% of listed firms, the head of one of the OMCs highlighted.
Highlighting how this reflects the undervaluation of government-owned oil firms, Puri said, “I want people to realise the dishonesty this reflects.”
Now that state-owned petroleum companies are in the process of investing in new businesses like green energy and petrochemicals, Puri also added that he wants the market — the investing community, as he called it — to decide the valuation of these companies.
