The state-owned Oil and Natural Gas Corporation (ONGC)’s Board has given an ‘in-principle’ approval for the proposal by the government of India to acquire 51.11 percent stake in Hindustan Petroleum Corporation Ltd (HPCL).

Furthermore, ONGC has constituted a committee of directors for examining various aspects for the proposal that will provide recommendations to the Board of Directors.

HPCL, currently owns and operates two coastal refineries at Mumbai and Visakhapatnam along with a JV refinery at Mangalore and another refinery of 9 MMTA in Bhatinda, Punjab by HMEL, a JV with Mittal Energy Investments. Its business includes operation of fuel stations selling petrol, diesel, LPG as also kerosene and other petroleum products. The company recorded its highest ever profit of Rs 6,209 crore during 2016-17, along with record high of consolidated PAT of Rs 8,236 crore.

In Q1 FY2017-18, HPCL’s PAT was Rs 925 crore, compared to Rs 2,098 crore in the corresponding quarter due to inventory losses due to the decrease in crude prices as against inventory gains during corresponding quarter of 2016-17.

With this acquisition, ONGC will add 23.8 million tonnes of its annual oil refining capacity, making it the third-largest refiner in the country after Indian Oil Corporation and Reliance Industries.