New Delhi, Jan 07: In a new twist to the debate on allowing oil PSUs to bid for HPCL, the Ministry of Disinvestment (MoD) has suggested that Oil and Natural Gas Corporation could realise its retail ambitions by merger with Indian Oil Corporation.

In its comments on petroleum ministry's plea for allowing ONGC to attain vertical integration along the entire oil chain through acquisition of Hindustan Petroleum, MoD is understood to have advised that oil ministry to revive its earlier proposal of merging ONGC and IOC to achieve the objective. ONGC's downstream refining and retail aspiration can be met through its merger with the country's larger refining and oil marketing company IOC, disinvestment ministry, which is opposed to allowing PSUs to bid for companies put on the block by government, suggested, highly placed sources said.
It cited a similar proposal mooted during the tenure of V N Kaul as petroleum secretary over a year ago.
Sources, however, said that petroleum ministry was not keen on the merger and the idea was not being pursued in "short term."
The issue of allowing ONGC to bid for HPCL would be decided by the Cabinet Committee on Disinvestment only after the government gets the advice from attorney general on the legal aspects of privatisation of a company which was nationalised by an act of Parliament. Petroleum ministry was also of the view that government would realise better value for its investment if all the interested parties are allowed to make competitive bids.

Sources pointed out that there was no formal proposal of merging ONGC and IOC before any ministry

Bureau Report