Ministry discusses revamping oil PSUs

Among the options discussed were the possible merger of the oil PSUs to create two or three strong oil firms and as an alternative restricting the oil firms to their area of core competence.

Discussions ranged from restricting firms like ONGC only into exploration to the possible merger of IOC with OIL; and HPCL, BPCL with ONGC. While opinions were viewed that GAIL should be allowed to continue as a separate gas major, arguments were also given against this stating that GAIL can be integrated with either of the two entities.

The brainstorming session was part of Ministry’s efforts to prepare India’s response to global oil challenge. The discussions took place in a situation where the three public sector oil marketing companies — IOC, BPCL and HPCL — are all vying for the same market and more like Numaligarh Refinery, MRPL and ONGC are ready to enter it.

However, the merger proposal is expected to meet with stiff resistance from firms like HPCL and BPCL, which, in turn, are arguing for allowing them to expand and diversify in the other areas of the oil sector. According to chief of an oil PSU: ‘‘Discussions take place on various proposals and Thursday’s meeting was part of this. No concrete proposal has been taken in the discussion.’’