Oil companies take 1st step

The first moves to cancel the over 3,000 petrol pumps, gas agencies and kerosene outlets began today with the Indian Oil Corporation (IOC) a...

The first moves to cancel the over 3,000 petrol pumps, gas agencies and kerosene outlets began today with the Indian Oil Corporation (IOC) and Hindustan Petroleum filing a caveat in both the Supreme Court and the Delhi High Court, to prevent local courts from granting ex-parte stay orders to any of the dealers whose licenses are to be cancelled following the Prime Minister’s directive yesterday.

IOC will file caveats in various other high courts over the next few days. Bharat Petroleum is likely to follow soon as well. The oil firms had requested the Petroleum Ministry today to file the caveats but were told they should go ahead and do it on their own.

Going to court: Dealers’ groups say they
aren’t in a hurry

New Delhi: Though individual petrol dealers may move court against the government’s decision to cancel the allotments, Jugal Batra, President of Delhi Petrol Dealers Association, told The Indian Express that his association, which has 350 pumps, will not move court.
Sources said the national Federation of All India Petroleum Traders is unlikely to move court on the issue. Batra said that most of those affected have Letters of Intent and are not members of the association. — ENS

Said HPC’s Director (Marketing) N K Puri: ‘‘This is a preventive measure to ensure that we are not deprived of being heard by the courts before it gives any order.’’

Today’s decisions came out of a series of day-long meetings between the oil PSUs — IOC, HPCL and BPCL — in Mumbai, to chart out a joint action plan on implementation of the cancellation orders.

‘‘We’re not terminating the dealerships right now … we will take top legal opinion on how to proceed with the issue,’’ said M S Ramachandran, IOC’s chairman, describing the deliberations of a meeting of top-level marketing officers of the three oil PSUs — IOC, HPCL, and BPCL (IBP is now owned by IOC) — today to chalk out a joint strategy.

Parallel meetings were also held between the legal departments of the oil PSUs. Oil company officials said in order to ensure the process could go ahead smoothly, the oil firms would have to file caveats in various courts, to ensure the affected dealers didn’t get stay orders in local courts.

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Filing a caveat is critical as the oil companies’ contract with the dealers provides for a cancellation only on the grounds of mala fide (like, say, adulterating petrol/diesel) or poor performance (like, say, sales growth not being up to the mark). Clearly none of these conditions applies to the decision to cancel the allotments due to favouritism in the process.

Oil company officials reiterated that all the outlets will continue to function for some time to come. Taking over the operations of the outlet isn’t an easy task, they claim, as the oil PSUs cannot take over the operations of 3,211 outlets.

Normally, if a new dealer is appointed, he/she could be given control of the outlet — but guidelines for auctioning these outlets are yet to be finalised, and the law ministry has yet to be consulted on these.

Of the 3,211 outlets whose licenses are to be cancelled, 1,371 are petrol pumps, 1,604 LPG outlets, and 236 sell kerosene — roughly half of all of these are operational at present.

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Out of 1,371 petrol pumps, 834 belong to Indian Oil Corporation (IOC), 215 belong to BPCL, 278 belong to HPCL and 44 belong to IBP. Out of the 1,604 LPG dealership, 761 belong to IOC, 465 to BPCL, 327 to HPCL and 51 to IBP.