Indian government could make an equity investment of Rs300bn ($3.66bn) in the country’s three oil marketing companies (OMCs), reported Economic Times, citing sources.

The capital infusion will be after the OMCs — Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) — submit their capital plans to the government.

According to a government official, “The Rs300bn that was set aside as capital support for the OMCs in this budget would go to them in the form of equity infusion. But this will be after they present the finance ministry with a set of capital investment projects. Primarily, the projects will be related to emission reduction, refinery upgradation etc.”

The administration intends to finish the process this fiscal after preparing the outline of the plan.

While the mode for this equity infusion is still being finalised and the official stated that OMCs will not receive capital assistance as part of a subsidy for selling petrol and diesel below cost.

“Right now the OMCs need a financial infusion. But the government is reluctant to give them subsidies,” the official added.

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Meanwhile, the OMCs are concerned that the proposed equity infusion could impact their share prices, market valuation, and market perception.

“We are aware of the government’s plan to increase equity in our company, but we have suggested alternatives,” a top official from an OMC said.

The OMCs have requested a financial grant or loan from the government, he continued, or they would like to receive the investment in the proportion of capital expenditures they plan for FY24.

In a separate development, Oil India Limited (OIL) revealed plans to commence exploration in Nagaland as soon as the climate allows.

The government-backed oil company has around 3000km² of exploration acreage in Nagaland.