Consolidation in petroleum sector: Why bigger is better for oil companies

Bigger oil PSUs will be in a better position to safeguard their interests against green energy

Public-sector undertakings dominate in the petroleum sector. Whether it is in producing oil and gas or the downstream business of retailing petroleum products, they have the lion’s share in the industry. The government, however, aims to create even bigger PSUs through consolidation.

“It’s not going to be a merger of all oil public sector undertakings into one,” Petroleum Minister Dharmendra Pradhan said after the announcement for consolidation was made by Finance Minister Arun Jaitley in his Budget speech. “It’s an in-principle decision taken by the government to develop a few integrated state oil companies, which will have better risk management