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Pratim Ranjan Bose

Kolkata , Aug. 18

ONGC is not finding much substance in the proposal mooted by the Union Ministry of Petroleum and Natural Gas to merge Mangalore Refineries and Petrochemicals Ltd (MRPL) — a standalone refinery — with an oil marketing company. .

The proposal was made to safeguard oil marketing companies from incurring mounting losses due to the non-revision of prices of petroleum products and high subsidies on LPG and kerosene.

The Petroleum Ministry has said it is weighing structural changes in the downstream sector in view of the recent crude price surge. The options include merging standalone refineries, which are currently witnessing an increase in gross refining margin, with oil marketing companies such as IOC, HPCL, BPCL and IBP.

According to an ONGC official, "Such proposals keep on coming. We do not find any substance in them." ONGC currently owns close to 71.6 per cent in MRPL and HPCL owns 16.95 per cent. ONGC had previously shown interest in buying back the HPCL shareholding in the company, which was not agreed to by the latter.

Asked whether ONGC would put its investment plans regarding MRPL on hold till the Ministry took a decision on standalone refineries, the sources ruled out any such possibility. "MRPL is a ONGC group company and we are bullish on the investment proposals taken up by MRPL," they said.

On the Rs 21,000-crore investment plan for setting up a special economic zone, an LNG terminal, a petrochemicals unit, a power generation unit, a pipeline and other related facilities in Mangalore, the sources said the company is yet to receive a formal clearance from the Centre.

ONGC had earlier proposed to set up the projects through an MoU with the Karnataka Government. The proposal, however, faced severe criticism from the Petroleum Ministry. Ultimately, the Prime Minister's Office had cleared the project last month on the grounds that instead of ONGC, it would be taken up by the group company MRPL.

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