Sources say there was really no logic in the first place to dismantle the DSB given that there was a backlog of dealership applications dating back to 1995-96, which were still to be cleared.

The move also sent all the wrong signals to the four oil-marketing companies -- IOC, BPCL, HPCL, and IBP --that they were in for hard times at a time when they desperately needed to beef up their marketing network. The unexpected turnaround in reviving the DSB has caught industry observers by surprise, while leaving the oil PSUs "extremely relieved". The grapevine has it that the BJP government decided to revoke the decision as it can still exercise full powers till September when elections are due. Whether the DSB will be dismantled againat that time remains to be seen though sources say this is unlikely given the backlash that followed the recent decision. The DSB, formerly Oil Selection Board (OSB), was instituted to help the oil companies select dealers and expand their marketing network effectively. There are around 50 such bodies in different states but around 10 are still not functioning, as there are some corruption cases pending against them.

The (then) OSB was set up in the mid-80s, and prior to this, the oil companies had the freedom to select their own dealers. With the OSB, the appointment of the dealer was done by a retired judge of the high court along with two representatives from the oil companies- one from the PSU selecting the dealer and the other from a counterpart. Hence, for an IOC dealership, the deciding people would be representatives from IOC and either BPCL/HPCL/IBP.

The system, undeniably, had its flaws as there were several variables that went into the appointment of a dealer. The first and most obvious was thepulls and pressures from various political corners which led to roping in candidates who were not fit for the job. The other, of course, was the reservation quota for various categories right from dealerships for war veterans to those slots based on caste.

"It is not as if the PSUs had any objections per se to such people taking over dealerships. The truth is that most of them find it very difficult to operate their own working-capital schedule," sources said. To elaborate, retail outlets on highways seldom go in for instant cash payment from truckers as these transactions are largely on credit. For a war veteran with limited cash on hand, coping with this business is almost impossible. This explains why most oil companies have problems in being able to deliver the best to customers. "It is very easy for people to say that we still have our fossilised ways of operations but the truth is that in retail trade, we work with one hand tied behind our back," PSU sources said. They reiterate that it would be aseasy for any of the marketing companies-IOC, HPCL, BPCL or IBP-to put up world class outlets except that there are no opportunities to do so.

As experts reiterate, the Centre would do well to give the oil companies complete powers to recruit their own dealers so that they hold their own in a free market. This becomes imperative given that there are several world majors which are keen on getting into the lucrative business of marketing petro-products and the best way to do this is to take over the business of an existing PSU. That is exactly what the Shell-Aramco joint venture strove to do except that the proposal has been put on the back burner by the petroleum ministry.