Pradhan rules out splitting GAIL but wants petrochem business divested

Oil Minister Dharmendra Pradhan today ruled out separating GAIL's gas transportation and marketing businesses but said the state-owned gas utility should divest its non-core petrochemical business at a good price.

To resolve the conflict arising out of the same entity owning the two jobs, GAIL will bifurcate the accounts and give outside parties access to its vast pipeline network.

"GAIL board has considered the issue and has assured that it will operate the two businesses of gas transportation and marketing independently and autonomously," Pradhan said.

He was speaking at the launch of the company's online portal for common carrier capacity booking by marketing entities and consumers for transportation of natural gas through its pipelines.

Splitting GAIL "is not on the government's agenda," he said adding his ministry wants efficiency in operations of the company.

Pradhan said GAIL was formed with the objective of building pipelines and over the past three decades has also become major marketer of gas.

Pipelines are crucial for taking natural gas to consumers across the country. Currently, the pipelines are concentrated in western and northern part of the country only.

"GAIL has to concentrate on pipeline laying. It is unacceptable that they neglect pipeline for marketing and petrochemicals," he said. "It is unacceptable that they dress up their balance sheet with margins earned from gas marketing and petrochemicals."
Petrochemicals is "non-core business" of GAIL, he said. "GAIL should exit petrochemical business when they get a good price."