21 October, 2020

Well Ahead Now

The IBP buy-out consolidates IOC's position in the petro sector

Gireesh G.V
Well Ahead Now
The government's fifth round of disinvestments—after BALCO, Modern Foods, CMC and ITDC hotels—has come with its routine quota of tensions. Indian Oil Corporation (IOC) has already started drawing flak for bidding an exorbitant price to acquire petroleum marketing company IBP. On the other hand, the new department of disinvestment (DoD) regulation preventing state-owned companies like IOC from bidding for the next two oil giants to be disinvested—BPCL and HPCL—to avoid a monopolistic regime, comes as a surprise.

"Does the DoD feel we seriously want to bid for BPCL and HPCL? We have nearly one-third of the country's refining capacity (32.3 per cent) and after acquiring IBP, we are not likely to be too interested in buying another retail network," IOC finance director P. Sugavanam told Outlook.

Sugavanam also denies all allegations of overbidding (Rs 1,153 crore for a 33.58 per cent stake in IBP). "That's the best way to keep competition out and it makes perfect business sense. IBP picks up 80 million tonnes of diesel and petrol per year from our...


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