India’s efforts to privatise refiner Bharat Petroleum Corp. Ltd. could spill over into the next fiscal year, according to a government document and sources, hurting New Delhi’s efforts to rein in a ballooning fiscal deficit. The privatisation of key companies, including BPCL, is a key part of government plans to pare the fiscal deficit, which has breached its target level just four months into the current fiscal year. Industry sources last year estimated the government’s 53.29 percent stake in BPCL could fetch USD 8 billion to USD 10 billion.

With India’s economy contracting by a record 23.9 percent in the June quarter due to COVID-19, a delayed sale of BPCL could hinder the government’s ability to generate funds for stimulus efforts aimed at restoring growth. New Delhi’s plan to sell its stake in BPCL was first announced in November 2019, and is part of a broader program to spin off or sell stakes in dozens of state-owned companies.

The sale has been targeted for completion in the current fiscal year at end-March, but the deadline for initial expressions of interest was pushed out by two months due to pandemic-related movement restrictions that have prevented potential buyers from inspecting the facility.

A sale status report issued last month and reviewed by Reuters showed the sale was only due to complete the third step of a 25-step process established for government divestments this month. The document suggests it could take as long as another 21 months for the sale to be completed, although some stages could be carried out concurrently. Potential buyers still needed to attain security clearance, conduct valuation assessments and agree financial terms.

”This looks challenging. But we are doing our best to complete the transaction in this financial year,” a senior government official familiar with the sale told Reuters. A second official said the process could take at least 7-8 months more, which would delay completion until at least the end of April, and mean that the proceeds of any sale would only hit government coffers next fiscal year, which begins on April 1.

”It may not be possible for overseas companies to do due diligence as air travel is restricted,” added a third official involved in the privatisation process.

All three officials declined to be named because of the sensitivity of the issue.

The sale also faces domestic opposition. The state government of Kerala, where BPCL’s 310,000 barrels per day Kochi refinery is located, fears job losses and plans to challenge the privatisation in the Supreme Court, its industry minister EP Jayarajan told Reuters.

Companies including Saudi Aramco and Rosneft have indicated they would look at BPCL since the privatisation plan was announced. BPCL shares have fallen more than 20 percent since November last year. Interest may be dampened as the industry looks to shift to greener energy investments.

The government had budgeted collections of over USD 27 billion from privatisations and minority stake sales of state-owned companies this fiscal year, but had raised only about USD 775 million after the first 6 months.