Niti Aayog Halts Oil India’s CGD Plans

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(FE)

The Niti Aayog has denied ‘permission’ to state-run Oil India (OIL) to venture into the country’s reinvigorated city gas distribution (CGD) business, arguing that exploration companies must focus on their core activities given the country’s stagnant oil production. An OIL-HPCL consortium had won bids for two geographical areas (GAs) — Ambala and Kurukshetra in Haryana, and Kolhapur in Maharashtra — during the eighth round of CGD bidding in 2017.

Under the guidelines issued by department of public enterprises in 2016, a PSU looking to create a JV with other companies needs to obtain approval from the Niti Aayog. The move by the think-tank is at odds with the government’s policy of encouraging integrated oil and gas businesses in the public sector via mergers of PSUs to create world-class entities. Last year, ONGC, the country’s largest explorer, acquired 51% in downstream company HPCL under a government directive.

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