Monday, April 6, 2009

Amar Singh jams spanner into RIL's proposal to hive off its petrol pumps to PSU Oil OMCs

Samajwadi Party MP Amar Singh jams spanner into RIL's proposal to hive off its petrol pumps to PSU OMCs

April 5: 8Having taken a tough decision to exit the the auto fuel retail business, Mukesh Ambani has been trying to sell or lease Reliance Industries Limited (RIL) idle petrol pumps across the country to state-owned oil marketing companies. However, the PSUs do not seem to be interested in taking the bait. Ambani's ambitions now appear to have run into political opposition in the form of Samajwadi Party MP Amar Singh, who is known to be very close to the senior Ambani's estranged brother Anil Ambani. Singh recently chose to express his objections to RIL's attempts to sell or lease its "non operational and defunct" petrol pumps to IOC and other India PSU companies in a letter to Prime Minister Manmohan Singh. 8In his letter to the PM, Singh expressed "shock" at the media reports on the proposed sale or lease, slamming RIL for its "blatant attempt to offload its stranded assets to government entities at the cost of national wealth." Singh has even gone one step further in accusing officials of IOC and petroleum ministry of conniving together to favour RIL for personal gains and has demanded a CBI enquiry to identify the concerned officials involved in the whole process. The Samajwadi Party MP also pointed out that since IOC and its subsidiaries have around 21,000 retail outlets throughout the country and commissioned hundreds of outlets last year itself, there is absolutely no need for the company to expand its network using second-hand assets.8It should be noted that RIL announced that it was shutting down its network of 1,432 petrol pumps across India -- which was set up at a cost of Rs 5,000 crore -- in March 2008 when its sales dipped to near zero as the company was unable to compete with the PSU oil companies, which sell fuel at subsidised rates. Reliance had recently sought an Expression of Interest (EOI) from IOC, Bharat Petroleum and Hindustan Petroleum for a possible partnership for reopening the petrol pumps, but this proposal seems to have died a quiet death. Another option floated by Reliance was to hive-off the company's petrol pumps into a joint venture company between RIL and the PSU oil marketing companies, who have been asked to quote the equity stake they may want in the new venture and their model for operating it. (Click on Details for more information) Details

No comments:

Post a Comment

Friends! You are all welcome to comment.