The Cabinet Committee on Economic Affairs today cleared the Oil and Natural Gas Corporation's proposal to acquire the Aditya Birla Group's 39.37 per cent equity in Mangalore Refinery and Petrochemicals Ltd.

However, in view of its financial implications for the Budget, the Cabinet deferred its decision on the integrated liquefied natural gas policy.

ONGC's proposal for acquiring the Aditya Birla Group's stake in MRPL was cleared by the Public Investment Board last month on the government's insistence.

ONGC is planning to invest Rs 60 crore (Rs 600 million) to pick up 39.37 per cent equity in the refinery at Rs 2 a share and infuse Rs 600 crore (Rs 6 billion) as fresh equity in the joint venture to gain management control of the refinery. The investment by ONGC in the refinery, therefore, comes to Rs 660 crore.

ONGC is learnt to be keen on acquiring MRPL at the earliest in order to start processing crude from the refinery and enter the lucrative retail sector.

Since the corporation has been barred by the Cabinet Committee on Divestment from bidding for the public sector Hindustan Petroleum Corporation Ltd, it is planning to set up independent retail outlets.