The standing committee on petroleum and chemicals has once again made out a strong case for retaining public sector oil companies under government control and has argued that there should not be any divestment in these companies.
The Divestment Development: Complete Coverage
In its fifty-third report presented to the Lok Sabha last month, the committee has said that the oil sector PSUs, which are making huge profits, have vast scope to unlock the value in assets turnover and have potential to compete with private sector at international level. Rather than divesting in these companies, the government should encourage and give them a free hand to perform.
The committee, headed by Mulayam Singh Yadav, has reiterated that the oil sector should be considered a strategic sector since it was the major source for energy. In fact, the committee has pointed out, at the time of the acquisition of foreign oil companies, the Acquisition Acts were enacted to have the control of the government on oil sector to maintain adequate supply of petroleum products at reasonable prices throughout the country. "Oil sector should, therefore, be treated as a strategic sector."
The committee emphasised that it was not against competition in this sector. But the oil PSUs should not be divested merely on the ground that they are to be freed from hurdles faced by them as PSUs to enable them to compete.
"The government should ensure that such hurdles -- bureaucratic or procedural -- are removed and the public sector oil companies are given more autonomy and freedom in decision-making and operations," the committee has said.
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