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HPCL, BPCL divestments on track

Even as a parliamentary panel advised the government against going ahead with the divestment of BPCL and HPCL, a ministry spokesman told Reuters on Friday that there is no change in the government's plan to sell stakes in these two state-run refiners.

Noting that the recommendations of such panels are advisory in nature and not binding on the government, the official said there was "no decision to rule out divestment in Bharat Petroleum Corporation and Hindustan Petroleum Corporation."

The parliamentary panel in its recommendation had further said that the existing public sector oil companies should be allowed to consolidate their position through merger and acquisition in the refining and marketing segments to achieve economy of scale and synergy.

Regarding the new entrants in the marketing sector, the panel said: "New entrants may not only grab the share in expended market but also corner the existing market as it happens in any industry. It might become extremely important for public sector units to consolidate their positions in the domestic oil sector."

The panel also noted with concern the government's decision to debar Indian Oil Corporation from bidding for BPCL and HPCL and asked the later to review its decision.

(With additional inputs from UNI)

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