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IOC keen to buy government stake in IBP

State-run Indian Oil Corp is eyeing a stake in IBP Co when the government divests equity in the petroleum marketing firm, officials said on Wednesday.

Several firms including Reliance Petroleum are seeking a stake in IBP as its network of 1,514 petrol pumps will give a headstart to new refiners after private refiners are allowed to retail their products next April.

"We are very serious about IBP. It has an attractive distribution network which we want," an IOC official, who asked not to be named, said.

IOC's chairman, M A Pathan, said in Bangalore IOC was looking at IBP "aggressively", the Press Trust of India reported.

IBP has petrol stations in eastern and northern India but does not have a refinery. Reliance has a refinery with a capacity of 27 million tonnes a year, but is not yet allowed to set up retail outlets.

Petroleum ministry officials said several global oil majors were also in the race for IBP.

Only IOC, IBP and state-run refiners -- Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd -- are allowed to set up petrol stations in India.

Officials said even after the petroleum sector is freed from government controls next year it would take a long time for any other company to set up a chain of retail outlets.

This is because of numerous permissions and clearances required and the prohibitive cost of acquiring land in big cities, making IBP's network all the more lucrative for firms interested in India's oil sector, officials said.

IOC, India's largest refiner, will have a clear edge over its rivals if it manages to take control of IBP.

The government has announced plans to sell a controlling stake of 33.6 per cent in IBP to a strategic partner as a part of a drive to privatise state-owned firms. It owns 59.6 per cent of IBP's equity.

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