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HPCL, BPCL selloff put off by 3 months

The Cabinet Committee on Divestment on Saturday endorsed the decision of a group of ministers to defer the divestment of Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd for a period of three months.

After the CCD meeting, Divestment Minister Arun Shourie told mediapersons that the time would be utilised by the government to come up with an integrated view on divestment considering the apprehensions expressed in various quarters.

Denying that the divestment process had been derailed, he indicated that the trouble was with divestment of PSUs in the 'strategic sector'. There would be further debate on this issue, Shourie said.

But there was no problem with PSUs bidding for other PSUs, except in some cases, which will be referred to the government, he said.

Earlier, Prime Minster Atal Bihari Vajpayee had called a meeting of his senior colleagues on Saturday morning to thrash out the differences. Among others, it was attended by Deputy Prime Minister L K Advani, Defence Minister George Fernandes, Petroleum and Natural Gas Minister Ram Naik, Finance Minister Jaswant Singh, Human Resources Development Minister Murli Manohar Joshi and Divestment Minister Arun Shourie.

Divestment in India Tourism Development Corporation hotels, Indian Oil Corporation, Oil and Natural Gas Corporation and Gas Authority of India has also been put off, Shourie said.

Sources said the presentation made by Naik at the meeting of ministers centered on three key aspects relating to privatisation of oil PSUs: strategic sale, allowing PSUs to participate in divestment process and completion of the ongoing refinery projects.

Naik has said his department had no objection on the divestment of up to 49 per cent in public sector oil companies, but strongly opposed strategic sale of equity in both HPCL and BPCL.

Naik reportedly told the meeting that if BPCL and HPCL are privatised, the production capacity of private sector will rise to around 60 per cent from the current level of less than 28 per cent.

During the 1965 and 1971 wars, he pointed out, private companies had refused to supply fuel to the border areas.

Naik asked whether the government wanted a private monopoly or the present system, which has been in operation for the past 28 years without any disruption in supplies.

Naik has also expressed fears of private companies forming cartels after the government removes all restrictions on marketing of oil products.

UNI, PTI

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