Mumbai: With 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.

The 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.

The reasons cited are:
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.

Crisil, 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.