The Supreme Court judgement relating to the divestment of Bharat Petroleum Corporation Ltd will put the brakes on several strategic investments and marketing initiatives planned by the public sector oil and gas marketer.

BPCL had been preparing to face increased competition after its divestment, a top BPCL executive said.

As the government will now have to get the Parliament's nod to divest BPCL and the legislative approval may take time to come, BPCL will remain answerable to the Comptroller and Auditor General for several more months.

This will deter the management of the public sector undertaking from taking risk-prone investment decisions, as well as competitive marketing initiatives to counter new and existing players, both in the private and public sectors.

The government has proposed to bring down its shareholding in BPCL from 66.2 per cent to 26 per cent through a public issue and an offer of shares to employees.

Any corporation with a government shareholding of 26 per cent or less does not fall under the purview of the CAG.

In view of this, the management was already planning new initiatives.

Among them were price cuts on retail and bulk products, and other huge investments in new businesses. "These will now be put on hold," S Radhakrishna, director (marketing), BPCL, said.

"The CAG can question us up if we incur losses on account of these investment decisions. But since we were soon going to be out of its purview, as a result of the divestment early next year, we had planned a few initiatives which will now get delayed," Radhakrishna said.

BPCL has also sought to enter the upstream sector, for both oil and gas. The exploration and production business is considered a high risk, high return business.

In order to balance the risks, BPCL said it would be looking at a mix of exposures in all three phases of the business -- exploration, development and production. For this, the oil PSU has budgeted Rs 1,000-1,500 crore (Rs 10-15 billion) over the next five years.

As the BPCL divestment will only result in the reduction of government holding but no change in management control, the Supreme Court decision is unlikely to have any other impact on its business plans.

BPCL will go ahead with its plans to set up an additional 800 retail outlets this year. It has already submitted an expression of interest for setting up petrol pumps in Sri Lanka.

Radhakrishna said of the 800 new petrol pumps proposed this year, around 240 had already been set up. He said BPCL would soon launch new branded products during the year, including high-end diesel.

The corporation, unlike public sector Indian Oil Corporation, has not launched branded diesels. It has launched branded petrol such as Speed and Speed 93.

More such branded fuels are in the offing, Radhakrishna added.