The Hindu Business Line : Govt to soon decide on ONGC petro retailing — Establishing MRPL as brand may be main option

ONGC's plan to enter petroleum retailing may take a decisive turn in the next few weeks. According to sources, the Union Petroleum and Natural Gas Ministry, which has initiated a `debate' on the issue of diversification of oil PSUs vis-à-vis competition among themselves, may finally take a stand in the next two months.

In the event of the Ministry's nod, ONGC will be faced with three options: Carrying out its existing plan to set up ONGC branded outlets; pursuing its retailing activity through the MRPL brand name; working towards a `mega-merger' which will bring the retail segment under the fold of ONGC.

Admitting that the move towards a mega merger (under which the oil PSUs would be merged into two parallel entities under the leadership of IOC and ONGC) was still in a `fluid stage' and had to cross a series of hurdles before taking concrete shape, the sources said that establishing the MRPL brand name could perhaps be the only available alternative before the company in the foreseeable future.

Sources said that despite all the debate, the Ministry had not taken any formal stance against the ONGC's retail foray so far.

"Our licences have not been withdrawn," company sources said. ONGC and MRPL had previously been granted licences for 1,100 and 500 outlets respectively.

On Tuesday, the ONGC Chairman and Managing Director, Mr Subir Raha, had remarked, "As on date, there is no change in our plan to enter retailing by this year-end".

Mr Raha had also said that ONGC's core competence lay in `oil and gas' while the core business was "exploration and production (E&P) of oil and gas."

He added: "I understand those debating the issue of core competence are mixing it up with our core business".

The ONGC chief also said: "What is interesting is that we are pioneers in producing a number of petroleum products in India and currently produce roughly 5 million tonnes of petroleum products from our own facilities in Uran, Hazira and other places.

"Taking MRPL's 10 million tonne production into account, as a group, ONGC caters roughly to 15 per cent of the country's total demand for petroleum products," Mr Raha said, emphasising that ONGC had substantial expertise beyond E & P.