"We have not taken a decision yet to allow private sector in the pipeline business," said Union petroleum minister Vazhapadhy K Ramamurthy. He said to date only Gas Authority of India (Gail), Petronet (a consortium of national oil companies and financial institutions) and public sector oil companies had the right to lay oil pipelines.

The minister acknowledged that "Reliance Petroleum, Essar Oil and some other companies have forwarded proposals for their own product pipelines," adding that the petroleum ministry was still "considering those proposals."

"Our overall view is that there must be 100 per cent investment by the private-sector entrepreneur and that their pipelines must not run parallel to those ofGas Authority of India, Petronet or any public sector oil pipeline." The petroleum ministry set up a committee last month to thrash out precisely these and other issues nettling prospective owners of oil pipelines.

The panel, headed by Petronet India chief and Indian Oil Corporation Limited (IOC) chairman MA Pathan, had its first meeting at the end of last month. The committee, comprising representatives of Reliance Petroleum, Essar Oil, Petronet India and the Oil Coordination Committee (OCC) is expected to meet again shortly.

Reliance Petroleum has proposed a 3000 km-long product pipeline that will run from the west coast to central India and part of the Deccan region. Indian Oil Corporation already has a 5762 km-long product pipeline sprawling across the breadth of the country, from Kandla in the west coast to Guwahati in the north-east.

Petronet India is in the process of laying five pipelines to evacuate petroleum products from the refineries of Reliance, Essar, Cochin Refineries, MangaloreRefineries and Petrochemicals Limited (MRPL) and from Madras Refineries Limited (MRL). The pipeline network proposed by Reliance already impinges on a part of Indian Oil's blueprint for augmenting its underground highway.

At the last meeting of the committee on pipelines, the oil companies had adopted a "give some, take some" attitude. Judging by what Ramamurthy had to say, the centre would prefer the national oil companies to give less and the private sector to take some.

The oil companies had also felt that some tiffs and tangles (in laying and operating pipelines) could be left to the Downstream Regulatory Authority to sort out. The minister said he was yet to decide whether the pipelines business (which will go commercial once oil marketing rights are freed in 2002) merited a separate pipeline regulatory authority. ``We are likely to take a decision shortly,'' he said.

Meanwhile, the Petronet India board is also scheduled to take a decision soon on offering a 10 per cent stake each to ReliancePetroleum and Essar Oil. Ramamurthy said some discussions had taken place on the subject.

``Yes,'' he said ruminatingly, ``private sector pipelines through Petronet, also has to be considered.'' So far Indian Oil, Bharat Petroleum Corporation, Hindustan Petroleum Corporation and IBP Company, together own 50 per cent of Petronet India.

Financial institutions, like Infrastructure Leasing and Financial Services (ILFS), State Bank of India (SBI) and ICICI Limited have 10 per cent stake in Petronet each. Essar Oil and Reliance Petroleum are contenders for the remaining 20 per cent of the shareholding and the Petronet board is known to be in favour of the proposal.