The petroleum ministry on Wednesday said there was no proposal to merge public sector oil firms Indian Oil Corporation and Oil & Natural Gas Corporation though there was a suggestion in this regard made by the divestment ministry.
"There is no proposal to merge IOC and ONGC," petroleum secretary B K Chaturvedi told reporters in New Delhi.
He was responding to queries by newsmen on the reported suggestion of the divestment ministry that ONGC may be merged with IOC to realise its retail ambition instead of allowing it to bid for oil refiner Hindustan Petroleum Corporation Ltd.
Chaturvedi said that government policy was encouraging the two oil companies to develop on individual strengths.
He, however, refused to comment on the divestment of HPCL and Bharat Petroleum Corporation Ltd.
In its comments on the petroleum ministry's plea for allowing ONGC to attain vertical integration along the entire oil chain through acquisition of Hindustan Petroleum, the divestment ministry is understood to have advised that oil ministry revive its earlier proposal of merging ONGC and IOC to achieve the objective.
The divestment ministry has proposed to sell 34 per cent equity in HPCL to a strategic partner and suggested that no PSU be allowed to bid for the oil major, whereas the petroleum ministry was in favour of allowing ONGC to bid, sources said.
In case of BPCL, it has proposed a public offer of 38 per cent, both in domestic and global/American markets, to bring down government equity to 26 per cent from current 66 per cent.