Gujarat has caught the fancy of a large number of corporate heavyweights.
The government freed diesel pricing last October, providing a level playing field to private companies like Reliance and Essar Oil.
The National Commodity and Derivatives Exchange Ltd plans to rope in oil companies like Indian Oil Corporation and Reliance Industries Ltd to boost Brent crude futures trading on the bourse.
Reliance plans to shut two-third of its 1,400 petrol pumps in the country by next month as it is unable to match the fuel price offered by state-run retailers, who get compensated by the government for selling fuel below the cost. Reliance and Essar make huge losses on selling petrol and diesel at prices higher than Indian Oil, Bharat Petroleum and Hindustan Petroleum. On an average, fuel at private outlets is costlier by Rs 4 to 5 a litre than the PSU pumps.
Since May 1, the dynamic fuel pricing model has been applied on a pilot basis in 5 cities
Low fuel prices to help oil marketing and refining sectors but upstream players will stay under pressure.
These refineries, commissioned mostly in the 1950s and 1960s during India's early industrialisation push, are inefficient and costly to maintain compared to their modern counterparts on the coast mainly operated by private companies.
The government shouldn't hide behind the veil of making a domestic giant out of the HPC-ONGC deal, rather it should just say it needs cash from this divestment exercise, says Sudhir Bisht.
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