State-owned oil refiners have been denied funds in the current fiscal to achieve the net-zero goal. The interim budget has also not provided any sum to buy crude to fill the country’s strategic reserves amidst volatility because of tensions in the Red Sea.

BPCL and HPCL are targeting to end net carbon emissions from their operations by 2040 and IOC by 2046.

The government has deferred to the next financial year the equity infusion of
Rs 15,000 crore equity in state-owned fuel retailers to support their investments in energy transition projects.

In the previous budget, finance minister Nirmala Sitharaman announced an equity infusion of Rs 30,000 crore in the trio to support their energy transition plans.

The finance ministry halved the equity support in November, and Sitaraman’s interim budget showed no allocation for equity infusion in the current fiscal. The Rs 15,000 crore has been earmarked for next fiscal.

The decision may be linked to the government prioritising spending to limit its fiscal deficit to 5.8 per cent of GDP this fiscal year.

Industry sources said the robust profit earned by the refiners could have resulted in the changed stance of the government.

IOC, BPCL and HPCL have reported a combined profit of Rs 69,000 crore for the nine months ending December against a loss of Rs 18,600 core in the corresponding period last year.

The board of IOC and BPCL had last year approved rights issues to raise up to Rs 22,000 crore and Rs 18,000 crore, respectively. The government was to participate in the rights issue.

Sources said the two firms plan to halve the rights issue.

In HPCL, the government will not make any direct equity infusion as it had sold its majority stake in the company to ONGC in 2018. The infusion is likely to be through ONGC.

While other state-owned oil companies such as ONGC and GAIL (India) Ltd have also lined up funds to achieve net zero carbon emissions, the equity support was limited to the three fuel retailers.

The budget last year allotted Rs 5,000 crore to buy crude oil to fill the country’s strategic underground storages.

However, the interim budget did not provide any funds either in the current fiscal or the next for filling the strategic reserves.