Govt wants to exit oil business: minister Pradhan

Wednesday 13th November 2019 05:32 EST

The BJP government desires to withdraw from the oil business and bring in market competition for the benefit and convenience of consumers, said oil minister Dharmendra Pradhan. “Oil (and) products are commodities and should be left to the market and regulator to deal with. The government has to get out. The Prime Minister’s energy justice is based on four consumer parameters - affordability, accessibility, sustainability and supply security. These are the government’s priority and it is meeting the objectives through transparent, process-driven policy,” Pradhan said.

This is the first categorical statement from the government on the guiding principle behind the proposed sale of the country’s third-largest fuel retailer Bharat Petroleum (BPCL). The proposal is likely to be cleared next week and will mark the Modi government’s first strategic disinvestment in the oil sector, considered the administration’s key public interface with people. Simultaneously, Pradhan’s ministry is also readying a rejig in other state-run blue chips under its wings - splitting gas utility GAIL into pipeline and marketing arms and allowing flagship explorer ONGC to decide whether to keep Hindustan Petroleum, the country’s second-largest fuel retailer, or find a buyer for it. All these measures, including the sale of BPCL, are expected to usher real competition and convenience in a market where state-run companies have a stranglehold.

Pointing to telecom, aviation and cement industries, Pradhan underlined how competition benefits consumers. The entry of private players led to lower tariffs, improved reach & service as well as rapid capacity expansion. “The government should be present only where its role is required for creating ease of living for people. What is the government’s role? It is to frame policy. In a progressive economy, the government’s job is to create facilities for wealth creation, not be a wealth creator,” Pradhan said.

Quoting the PM Narendra Modi, Pradhan said the government has no business to be in the oil business. “When the PM says that, it is not a slogan. It is the party’s philosophy. We believe in it. This democracy is committed to the welfare of the common man. We have to create ease of living through open, transparent and convenient regulation. End product is important. Who is running the business is not. Does a high-cost company offer affordable price or competition?” he said. The minister said the public sector had done a tremendous job and would have a space in public policy. But he also pointed to food aggregators to say, “If today food can be home delivered, why can’t fuel be delivered at your doorstep? Opening up of the fuel retail market for non-oil companies is part of a well-thought-out strategy to create convenience for consumers.”

comments powered by Disqus

to the free, weekly Asian Voice email newsletter