Fitch Ratings has affirmed Bharat Petroleum Corporation (BPCL) long-term issuer default rating at 'BBB-'. The outlook is stable. At the same time, the agency has affirmed BPCL's senior unsecured rating of 'BBB-' and the 'BBB-' ratings on its USD 500 million and CHF200 million senior unsecured notes.
BPCL has very strong linkages - operationally and strategically - with its 54.9% shareholder, the Indian state (BBB-/Stable). Its rating is equalised with that of India based on Fitch's Parent Subsidiary Linkage criteria.
The prices of around two thirds of the petroleum products (including retail diesel, public distribution kerosene and household LPG) marketed by BPCL are regulated by the government, and sold at prices lower than international market prices. The government funds the under recoveries (UR; difference between market prices and regulated prices) partly through direct budgetary support and by directing upstream oil companies to provide discounts to BPCL.
Significant Player: BPCL is the third-largest refiner in the country with a capacity of 30.5 million tonnes per annum (mtpa) that accounted for 14% of capacity in India, and the second-largest marketer of petroleum products with a 21% market share. In the financial year ended March 2014 (FY14), BPCL marketed 34.3mtpa (FY13: 33.7mtpa) domestically and exported 3.1mtpa (FY13: 3.2mtpa) and refined 28.7mtpa (FY:13 28.6mtpa) of petroleum products.
