Naik victory as cabinet defers HPCL and BPCL sale
HOW WRONG WE were! Last month we predicted the end of oil minister Ram Naik and accelerated privatisation of Hindustan and Bharat Petroleum, spearheaded by disinvestment minister Arun Shourie, his free market rival in the cabinet.
Nothing could be further from the truth! Naik is more secure than ever, and any decision on disinvestment has been postponed for three months! Shourie, meanwhile, is isolated in cabinet, a lone voice. Last week on 7th September, hours after returning home from the World Petroleum Congress in Rio, Naik walked into a crucial cabinet meeting to give a 20-minute speech on why the two refiners should stay under his control.
He cited the 1965 and 1971 wars with Pakistan when, he alleged, Shell and Esso refused to supply India with fuel. He also cited a decision by Cairn Energy and British Gas to send home staff during recent tension with Pakistan.
In times of war, alluded Naik, foreign owners would think of their interests first and India's interest second. Reason enough, he argued, to keep them away from state-owned oil companies.
Emotional claptrap perhaps, but enough to scare the PM and cabinet colleagues into postponing a decision on privatisation until cabinet "reaches a consensus". What now Well, nothing! To put it bluntly, privatisation of BPCL and HPCL is a non-starter and if you are a foreign oil company with eyes on either you would be well advised to sink your business development budget on another "opportunity" elsewhere! It's unlikely the cabinet will ever reach "consensus" on this issue - opposition from Naik will always block it.
Until he goes, any idea of privatising BPCL or HPCL is as good as dead.