India's oil ministry wants 49% FDI cap

India’s petroleum ministry has recommended a hike in the foreign direct investment (FDI) cap in government-owned refineries to 49%, from the current 26%. Foreign companies, such as Venezuela’s Petroleos de Venezuela (PDVSA), France’s Total and Saudi Arabia’s Saudi Aramco, have shown interest in buying stakes in the government-owned refineries. The proposal by the petroleum ministry comes comes after Mittal Investments, a Luxembourg-based company, picked up a 49% stake in Hindustan Petroleum Corporation Limited’s Bhatinda refinery in Punjab. On June 21, the union cabinet permitted Lakshmi N. Mittal to pick up a 49% stake in the nine-million-ton-refinery being set up by Hindustan Petroleum Corporation Ltd. (HPCL). However, the Cabinet approval was specific only to Mittal Energy Investment Pte Ltd. for HPCLs refinery at Bhatinda and the 26% cap on FDI remained in place. (June 5, 2007)