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No proposal to merge state-owned firms, says Oil Minister Dharmendra Pradhan

Oil Minister Dharmendra Pradhan said ONGC has acquired 51.11 per cent of government equity shareholding in HPCL.

Published: 08th July 2019 07:16 PM  |   Last Updated: 08th July 2019 07:16 PM   |  A+A-

Oil Minister Dharmendra Pradhan

Oil Minister Dharmendra Pradhan (Photo | EPS)

By PTI

 

NEW DELHI: Oil Minister Dharmendra Pradhan Monday said there is no proposal, at present, for the merger of state-owned oil and gas entities under consideration of his ministry.

While state-owned Oil and Natural Gas Corporation (ONGC) had last year acquired government stake in Hindustan Petroleum Corporation Ltd (HPCL), Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) were both keen on acquiring gas utility GAIL India Ltd.

"At present, there is no proposal to merge state-run oil and gas entities under consideration of the ministry," Pradhan said in a written reply to a question in the Lok Sabha here.

He had on February 7, 2018, told the Rajya Sabha that IOC and BPCL have separately indicated to the petroleum ministry their interest in taking over GAIL to add natural gas to their oil refining and marketing business.

Then finance minister Arun Jaitley had in the Budget 2017-18 unveiled the government's plan to create integrated public sector oil majors "through consolidation, mergers, and acquisitions" so that the merged company has the "capacity to bear higher risks, avail economies of scale, take higher investment decisions" and is "able to match the performance of international and domestic private companies".

In response to this, ONGC expressed interest in taking over refiner HPCL and completed the Rs 36,915 crore acquisition in January last year.

"IOC and BPCL had written to the ministry for integration with GAIL (India) Ltd. However, the government has not taken any decision in this regard," Pradhan had said last year.

In the reply on Monday, he said ONGC has acquired 51.11 per cent of government equity shareholding in HPCL.

"Post-acquisition by ONGC, HPCL will continue to be a central government public enterprise (PSE), having become a subsidiary of ONGC. It will maintain its cultural uniqueness and brand identity," he said.

For GAIL, it was said that the government may separate the firm's natural gas transportation and marketing business and sell off the later to a prospective bidder.

Incorporated in August 1984 by spinning off the gas business of ONGC, GAIL (India) Ltd owns and operates about 14,000 km of natural gas pipelines in the country. It sells around 60 per cent of natural gas in the country.

The government has a 54.89 per cent stake in GAIL India.

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