the dismantling of the administered price mechanism (APM) imminent
(the government is determined to bring about the necessary changes from
April 2002), the impact on the domestic petroleum and refining sector
is at best expected to fuel a slow change.
culmination of the deregulation process is expected to change things
very slowly, feels Crisil. Public sector oil and petroleum companies
are expected to hold on to their leadership positions at least for
another three-to-four years.
1) The virtual dominance of public sector oil companies in the
marketing of petroleum products.
2) Uncertainties related to the setting up of a regulatory body as an
alternative to the oil coordination committee.
3) The presence of a large number of informal product exchange
agreements between public sector oil companies.
4) Public sector oil companies are ideally suited to face the
challenges of the new era through their vast network of terminals,
depots, tankages, retail outlets and pipelines, all of which are
spread across the length and breadth of the country.
5) The proposed entry of new private sector players into the marketing
of petroleum products is unlikely to pose any serious challenge to the
leadership of public sector oil companies.
6) Anticipating greater challenges and competition in the post-APM
era, public sector oil companies have already initiated the process of
acquiring and exercising greater control over their retail outlets
like ownership, instead of leasing
out, refurbishing them as well as effecting modernisation
with customer care as a focus area.
however, concedes that new private sector refineries are set to score
over their public sector counterparts in the area of refining, which
has already been decontrolled.