Financial Daily from THE HINDU group of publications
Tuesday, Oct 21, 2003
Financial Daily from THE HINDU group of publications Tuesday, Oct 21, 2003 |
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Industry & Economy
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Disinvestment Ministry seeks discussion paper on IOC Our Bureau
New Delhi , Oct. 20 THE Ministry of Disinvestment (MoD) has written to the Petroleum Ministry, asking the latter to prepare a discussion paper on Indian Oil Corporation (IOC) and its assets. The MoD's note is a follow-up of the recent Cabinet decision to "explore the possibility of divesting the marketing arm of the company." Over the last week, the Petroleum Ministry has been busy preparing a detailed report on the company. The discussion paper will encompass the strengths of the company, the geographic spread of its marketing outlets, etc, officials said. IOC controls around 52 per cent of the retail petro-product marketing network in the country. The discussion paper will also discuss the Assam Oil Division (AOD) of IOC. The division was the erstwhile Burmah Shell Oil Trading Company and was merged with IOC through a Parliamentary approval. The division has a 0.65 million tonne refinery (Digboi unit) and operates 322 retail outlets in the north-eastern region of the country. It also sells petro-products under the brand name `Rhino' in eastern and northern India. According to analysts, it takes around 470 days to complete the formalities for splitting a company. Hence, even if the Government decides to go ahead with the sale of the marketing unit, it cannot be initiated before early 2005. The decision to explore the possibility of selling off the marketing unit of IOC was one of the options that the Cabinet approved recently while discussing the stalling of the privatisation of Bharat Petroleum Corporation and Hindustan Petroleum Corporation Limited by the Supreme Court. The Court directed that Parliamentary approval be sought for sale of the companies.
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