ONGC defers retail plans

Oil and Natural Gas Corporation (ONGC), one of India’s state-owned company, has deferred its plans to set up retail outlets for gasoline and diesel fuel. ONGC and its subsidiary Mangalore Refinery and Petrochemicals Ltd. had finalized plans to expand their retail network to 1,100 petrol pumps by 2008 as part of diversification into the downstream sector. The government earlier asked ONGC to abandon its retail plans and to focus instead on oil and gas exploration and production. Compensation for selling fuel below the cost of production is available only to existing public sector oil retailers, such as the Indian Oil Corporation Ltd, Hindustan Petroleum Corporation Ltd, Bharat Petroleum Corporation Ltd. and Indo Burma Petroleum (IBP), but not to new retail players such as ONGC. (August 9, 2006)