Oil Sector Reforms To Take A Beating

The petrol pump allotment issue has dealt a severe blow to the ongoing oil sector reforms. It has pushed back the marketing plans of public sector oil companies that were bracing themselves for competition from the private sector in the retailing of auto fuel.

The proposal to set up a downstream regulatory body, a step expected to boost the oil sector reform process, is still awaiting parliamentary approval. Though the Bill for the purpose was introduced in the last session of Parliament, it has not been taken up for consideration so far. All hopes of any legislative work in the rest of the ongoing Parliament session have been put to rest because of the repeated adjournments over the petrol pump allotment issue.

In the absence of a regulatory body, the government will continue to keep its grip on the oil sector. The pricing of various petroleum products, dealers' commissions, fuel transportation charges and various other issues will continue to be influenced by the government, till a regulatory body is set up.

The controversy over the allocation of petrol pumps has also put the disinvestment exercise in public sector oil companies on the back burner. The disinvestment ministry has been pushing for the sale of the government equity in three public sector oil companies