Privatisation of IBP Petroleum

Vol 4, PW 18 (11 Oct 00) People & Policy

Yes, it has finally happened.

Anyone interested in acquiring a stake in 1,500 petrol pumps across India can now bid for a stake in IBP Petroleum (apparently the company no longer likes to call itself, 'Indo-Burmah Petroleum). On 6th October the Cabinet Committee on Disinvestment met under Prime Minister Vajpayee and agreed that the government will sell 33.59% of its stake in IBP through a process of international global bidding, bringing its stake down to 26%.

Oil minister Ram Naik, finance minister Yashwant Sinha and disinvestment minister Arun Shourie were present during the meeting. This important policy statement could still take time to translate into reality.

If the furore provoked by the global tender for a part of GAIL is anything to go by, it will be preceded by politically-motivated criticism and no amount of official knit-picking, despite claims by Shourie that the process will be accelerated by removing "multiple consultations and repeated references to the committee of secretaries." In the same breath, Shourie confirmed the cabinet decision has to go through a three-stage process before coming back to the same Cabinet Committee on Disinvestment for final approval! Roadblocks will come up at the first stage, when Shourie's ministry prepares a "note" for circulation to other ministries for "comments". Oil minister Ram Naik is widely perceived to oppose the sale of state-owned oil companies.

Objections, if any, will come from him.