Relaxing existing restrictions on Foreign Direct Investment (FDI) in public-sector petroleum refineries, the Union Cabinet, on Thursday, allowed steel baron Lakshmi N Mittal to pick up 49 per cent stake in state-owned Hindustan Petroleum Corporation Limited’s Bhatinda refinery.
The Cabinet at its meeting chaired by Prime Minister Manmohan Singh relaxed the FDI restrictions in state-owned oil refineries based on recommendations made by petroleum ministry, Parliamentary Affairs Minister P R Dasmunshi told reporters here.

Largest FDI
The petroleum ministry had earlier granted project-specific approval to Mittal Group’s plan to acquire the stake in the nine million tonnes per year refinery for Rs 3,365 crore through its 100 per cent arm, Mittal Energy Investments Pte Limited — incorporated in Singapore.
The Cabinet approval was required since current government policy restricts foreign direct investment in public-sector petroleum refineries to up to 26 per cent.
Following the approval, HPCL along with Mittla Energy Investments Pte Limited will now hold 49 per cent stake each in the Rs 17,973 crore project, while the balance two per cent would be allocated to financial institutions.
Justifying the relaxation, Mr Das munshi said “this joint venture will be the largest FDI in PSU in refining sector. The Mittal-HPCL joint venture will enhance availability of petroleum products in the north. It will also help in globalisation of the HPCL.”