Arun Shourie's sell-off plans have had a rough ride

Fresh from a three-day strike in March, oil sector workers have successfully petitioned the court to suspend the sale of Bharat Petroleum and Hindustan Petroleum Corp Ltd (HPCL), which between them supply 40% of India's $15bn retail oil market.

Since the companies were nationalised by parliament, they say, only parliament - and not, as the government holds, the cabinet - can sign off on their sale.

A hearing is due within three weeks, an oil workers' association lawyer told reporters, at which both the government and HPCL - which is first on the block - will make their case.

Shares rise

Investors are still betting that the schedule for selling HPCL, which calls for due diligence to start in August and the sale to be complete by November, will remain intact.

"Some traders who had expecting a decision today were disappointed and that led to some initial selling," said Ketan Jhaveri, a director at D.H. Securities.

"But long-term players are still betting that privatisation will go through and the bidding will be aggressive."

Shares in HPCL were 1.7% higher at the close of trade in Bombay, also known as Mumbai, despite a slight fall early in the day after the court made its decision known.

Roadblocks

The privatisation process has repeatedly run into trouble, and only on Thursday Arun Shourie, the Disinvestment Minister, told parliament that he was ditching plans to offload the National Aluminium Company, the country's number two in the sector.

The programme has missed its targets four years in a row thanks to vociferous protests from, among others, the hardline Hindu nationalist wing of the government.

For some on the more radical fringe of the government, the plan to float 35% of Bharat on the market and sell 36% of Hindustan to a single investor is tantamount to selling-off national treasures.