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Iraq war may be excuse to defer HPCL, BPCL selloff

Aditi Phadnis & Ajay Singh in New Delhi

The divestment of Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd is likely to be deferred in the face of a possible Anglo-American war against Iraq.

Senior government officials are expecting a stormy meeting of the Cabinet Committee on Divestment on Saturday evening.

It will be preceded by a meeting on political issues of six ministers, including Defence Minister George Fernandes and Petroleum Minister Ram Naik. Corporate warfare is expected to be in full view at this meeting.

To present a united front to the world, it is likely that the government will use the attacks on Iraq as an excuse at the CCD meeting.

Drawing on his experience as foreign minister, Finance Minister Jaswant Singh is likely to cite the recession in the US, the disturbed economic conditions in Japan and the instability in oil prices after the US-UK attack on Iraq as affecting the appetite for divestment.

Till late Friday night, there was no indication that a via media had been evolved to reach a consensus in the CCD on the divestment of the oil majors.

While Fernandes continued to stick to his stand that selloffs should not lead to private sector monopolies, Divestment Minister Arun Shourie was keeping his powder dry with an impressive marshalling of arguments to prove that the strategic sale of BPCL and HPCL was the only sensible way to disinvest them.

Shourie has a staunch ally in K C Pant, deputy chairman of the Planning Commission and also a member of the CCD.

On the other side is Naik, who met Fernandes in Zurich last week. Naik today met Deputy Prime Minister L K Advani within hours of his return from Brazil. He is understood to have opposed the strategic sale of equity in public sector oil units, a view shared by Fernandes.

A senior government functionary admitted that while the deferment will be due to "other reasons", the Iraq war would help the parties involved keep face.

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