The government will give a joint approval for the proposed initial public offerings of the three state-owned oil refining and marketing companies -- Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL).
Addressing a press meet here today, Ram Naik, Union minister of petroleum and natural gas, said: "The ministry will take all the three proposals (of IPOs) together before the Cabinet for approval."
The ministry has already cleared BPCL's Rs 1,000 crore IPO proposal. Naik was speaking at the inaugural function of a higher grade petrol, 'speed', launched here today by BPCL.
The premium grade petrol is priced at Rs 34.90 a litre, Rs 1.25 per litre higher than the normal unleaded petrol.
"I have asked IOC and HPCL to get back with a final proposal for their respective IPOs. They will have to expedite their proposal as I do not want to delay BPCL's plans of an IPO," Naik added. The oil companies are raising money from the market to build additional capacities in the form of new refineries in the country.
Naik pointed out that the three oil companies have decided to set up one grass-root refinery each -- IOC a nine million tonne per annum (mtpa) refinery at Paradip in Orissa, HPCL a nine mtpa Bhatinda refinery in Punjab and BPCL with its six million tonne refinery at Bina in Madhya Pradesh.
"All these are long-term projects and need huge financing. The share market is a good medium to raise funds," Naik claimed.
He further stated that the IPOs will improve the debt-equity ratio of the oil companies which will help them bargain better when they are divested.
Naik said that the IPOs of the oil companies will not hamper the disinvestment process of the two oil companies -- HPCL and BPCL.
On the Petroleum Regulatory Board Bill, Naik pointed out that the ministry will introduce the Bill in the Lok Sabha in the monsoon session.
"Till such time that the Bill is passed/approved by the government, the ministry of petroleum and natural gas will continue to act as a regulator," Naik added.
The ministry is making a presentation before the Prime Minister on the regulatory bill. Besides, the ministry has also decided to throw a dialogue with the oil companies, financial institutions and consumer organisations in Delhi on the Bill.
The first such meeting will be held before July 13. "If the Bill is not placed before the Lok Sabha at the monsoon session, then the dialogues will also be carried out in other centres such as Ahmedabad, Guwahati and Hyderabad," Naik added.
Earlier, at the launch function of the premium grade fuel, Naik said that Indian refineries will need an additional investment of Rs 10,000 crore for introducing Bharat Stage-II norms.
"The final report of the Dr Mashelkar Committee on auto fuel is expected by this month end. Following this, the government will finalise its auto fuel policy," he said.
Fuels conforming to Bharat Stage- II norms will be introduced in the four metros and the cities of Bangalore, Hyderabad and Ahmedabad where there are high vehicular traffic, latest by 2003.
The Euro-II quality emission norms for all categories of vehicles would be introduced in seven mega cities by April 1, 2005, and the entire country by 2010.
Naik also paid homage to the late Dhirubhai Ambani by calling him the "Bheeshma pitamah" of India's oil and gas sector.
He lauded Reliance Industries' contribution to India's oil sector by setting a 27 million tonne refinery at Jamnagar in Gujarat. He also pointed out that by the merger of Reliance Petroleum with Reliance Industries, RIL is amongst the global Fortune 500 companies.
