Consolidation in public sector oil firms may be back on table in FY22

After a gap of more than two years, the government may again revive the plan for further consolidation in the public sector oil companies by allowing mergers between producing, marketing, gas transportation and consultancy companies, leaving just few large integrated entities in operation.

The move follows the design of the new privatisation policy unveiled in this year’s Budget. As per the policy, only a bare minimum presence will be maintained in the strategic sectors, including petroleum, while other entities would be privatised.

With the government already proceeding with the privatisation of Bharat Petroleum Corporation Ltd (BPCL), it is felt that the bare minimum principle would allow for consolidation in the sector through mergers and amalgamations.