Naik, Shourie Ready Cases For Ccd Meet

Petroleum minister Ram Naik may plead before the Cabinet Committee on Disinvestment (CCD) that the public offer route be adopted instead of strategic sales for disinvestment in Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL).

Petroleum ministry officials, who are busy preparing the presentation that Naik will make to the CCD on September 7, said the minister was of the opinion that the fruits of growth of these blue-chip public sector oil companies should go to the general public instead of big corporates.

Industry sources said in the public offer route, the government being the single largest shareholder would continue to retain management control of the two PSUs, whereas in strategic sales, the management control would pass on to the buyer.

The minister would also stress the strategic importance of these oil companies, the officials said, adding that Naik would try to drive home the point that in case of hostilities, only government companies would provide fuel to the armed forces.

However, the disinvestment ministry is expected to tell the meeting that a public float would render the two oil PSUs vulnerable to creeping acquisition.

Divestment ministry officials, who are busy fine-tuning a point-by-point rebuttal of the petroleum ministry's arguments against strategic sale, said the country was already self-sufficient in the oil refining sector, and with very little scope for exports, capacity addition would only create a glut in the market.

"Against a demand of 98 million tonne per annum, the country already has an installed capacity of 114.5 million tonne. Refining margins are under tremendous strain, and it makes little sense to go in for greenfield projects at this stage. Any expansion decisions should be left to the future management of the companies," a disinvestment official said.

Mahajan joins issue

Communications minister Pramod Mahajan joined the detractors