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Public sector oil companies pay no heed to PM’s austerity advice

Public sector oil companies pay no heed to PM’s austerity advice
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First Published: Sun, Jun 29 2008. 11 39 PM IST

Little thrift: An IndianOil building in New Delhi. The firm has sent a 14-member delegation to Madrid. (Photo: Rajeeb Dabral/Mint)
Little thrift: An IndianOil building in New Delhi. The firm has sent a 14-member delegation to Madrid. (Photo: Rajeeb Dabral/Mint)
Updated: Sun, Jun 29 2008. 11 39 PM IST
New Delhi: Prime Minister Manmohan Singh’s call for austerity hasn’t quite been heard in the oil ministry or public sector oil companies, judging from the size of the delegations they have dispatched to the five-day 19th World Petroleum Congress (WPC) that began on Sunday in Madrid, Spain.
India is being represented at the event by as many as 77 executives from state-owned oil companies and seven officials from the ministry of petroleum and natural gas, including oil minister Murli Deora.
Oil and Natural Gas Corp. Ltd (ONGC) has flown 23 people to the event, followed by oil marketing and refining companies. Indian Oil Corp Ltd (IOC) sent 14 officials to the Spanish capital, while Hindustan Petroleum Corp. Ltd (HPCL) is being represented by 13 delegates and Bharat Petroleum Corp. Ltd (HPCL) by nine.
Little thrift: An IndianOil building in New Delhi. The firm has sent a 14-member delegation to Madrid. (Photo: Rajeeb Dabral/Mint)
As world crude oil prices scaled records, the Centre this month announced an increase of Rs50 per cylinder of cooking gas and raised the price of petrol and diesel by Rs5 and Rs3 per litre, respectively, after which it unveiled a clutch of measures to curb wasteful spending.
The Prime Minister has written to his colleagues urging austerity within the government and the finance ministry directed other ministries to slash non-Plan expenditure by 10%, and to even stop holding conferences at five-star hotels, to save an estimated Rs6,000 crore this fiscal year. The insistence on austerity led to several overseas visits being cancelled.
The policy of getting state-owned oil marketers to sell fuel at a price lower than the cost of production is expected to result in losses of around Rs2 trillion for such firms in 2008-09.
“The reason why we are taking so many people is because we have been entrusted with the responsibility of logistics and administrative support for the entire Indian delegation,” said R.S. Sharma, chairman and managing director of ONGC. “There are also more than 20 meetings lined for us and we need people to attend them.”
To be sure, the congress is an influential forum for the global oil and gas industry where representatives of governments, public and private sector oil companies and other stakeholders in the sector come together every three years. More than 4,000 delegates had been expected at the event this year.
The private sector’s presence at the event is minimal. Cairn India, has sent a lone representative. Shell India, BG India, and Essar Oil have kept their delegations small, relative to the size of the teams sent by the public sector.
IOC chairman and managing director Sarthak Behuria defended the size of his company’s delegation.
“Private sector participation from India has no role to play in the oil sector as it is dominated by public sector companies,” he said. “As compared to Rs300 crore that we are losing every day, by not taking a delegation to the WPC, we would have saved to the maximum Rs1 crore.
“Austerity measures, according to me, would be to reduce the consumption of petroleum products. The reason why we are taking this delegation because we also need to lobby around for increasing crude production,” Behuria added.
Oil minister Murli Deora and executives at HPCL and BPCL could not be contacted.
But a senior petroleum ministry official, who did not wish to be identified, said, “While the austerity measures were announced recently, the participation for the congress was confirmed over a year ago.”
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First Published: Sun, Jun 29 2008. 11 39 PM IST