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Reliance non-committal on IBP divestment issue

Our Correspondent in Bombay

The Reliance group adopted a wait-and-watch policy on Friday vis-a-vis the government's decision to offload 33 per cent stake in IBP, the state-owned petroleum marketing and distribution company.

"We are yet to study the full details of the government announcement. We do not know what are the exact terms and conditions for bidding for a stake in IBP. We are gathering more information. We will announce our plans shortly," a company spokesperson said.

Meawhile, Hindustan Petroleum Corporation Limited has said that it would bid for the entire 33 per cent stake that the government plans to offload in IBP.

Reliance Petroleum, the world's largest grassroots refinery, started commercial operations in September. It has been toying with plans for marketing tie-ups with petroleum companies.

Reliance Petroleum had sought permission from the petroleum ministry to market its own products, but is yet to receive the clearance. The existing policy forbids companies in the private and joint sectors from marketing petroleum products on their own -- only the nationalised oil companies are allowed to do that.

However, by 2002, India is to complete the full deregulation of the sector, in sync with the World Trade Organisation regime.

One of the options for Reliance Petroleum has been to acquire companies that have marketing infrastructure. Announcing the quarterly results of Reliance Industries on July 20, Anil Ambani, the group's managing director, had said: "The only company (with such an infrastructure) happens to be IBP. Clearly, it is a candidate that would be interesting for anybody who is looking at petroleum marketing."

A controlling stake in IBP would give Reliance access to an established network of 1,500 retail outlets for petroleum products countrywide, besides 375 kerosene dealerships and six liquefied petroleum gas or LPG distributors.

The Ambanis have never hidden their ambition to bid for public sector petroleum companies as and when the government announces its divestment plans. This was in tune with their plans for growth through acquisitions and fresh capacity creation.

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