The committee comprises TL Jain, general manager (finance) IndianOil, CK Sengupta, executive director (finance) Bharat Petroleum Corporation, RN Sharma, general manager (finance) Hindustan Petroleum Corporation, J Mehta, managing director, MRPL, P Raghavendran, vice-president, RPL, and Ram Singh, additional director (finance), Oil Coordination Committee.

According to sources, the report is expected to be submitted by the end of next month. It will be a vital input to the Centre given that both RPL and MRPL are stand-alone refining companies which are keen on petro-product retail trade.

The big three - IOC, BPCL and HPCL - jointly help evacuate RPL's products while HPCL is the marketeer for MRPL by virtue of the fact that it is the co-promoter of the nine million tonne refinery.

The two private sector refiners realise that it makes sense to go in for direct marketing which is a more profitable option. Though the initial investment will be considerable (at least Rs 2 crore for each retail product outlet), the medium-term gains would more than compensate. RPL has already planned a joint venture with IOC once market-determined pricing comes into effect from April 1, 2002. The new company will cater to RPL's retail needs through IOC's vast network of over 7,000 outlets. It will also create additional infrastructure in the marketing chain for the future which could include retail outlets, pipelines etc. Sources say that the ministry is expected to give its nod shortly as there is a dire need for RPL to have a defined evacuation pattern for its products.

The ministry has already acknowledge that there is no way PSU refiners like Madras Refineries and Cochin Refineries can hold their own in a deregulated scenario and is working towards a recast proposal. As regards private players, it is more or less certain that the IOC-RPL joint venture will get a formal nod soon while MRPL, likewise, could chalk out its own course of action. A 26:26 joint venture of the AV Birla group of companies and HPCL, MRPL had roped in Andersen Consulting to examine the prospects of direct marketing, a function that is presently being done by co-promoter, HPCL.

Andersen is categoric that the company should go ahead though details of its recommendations could not be obtained. Sources, however, say that MRPL's plan hinges on come crucial issues. One is timely induction of a strategic partner who will impart the financial muscle and marketing strategy for a retail plan. The present contenders are TotalFinaElf of France and Kuwait Petroleum Corporation (KPC) while other companies from the middle east have also shown some interest. The biggest advantage MRPL offers is that there is a readymade facility which is fully operational.

It is but obvious that there is no way MRPL can hope to replicate a retail product chain on the lines of HPCL which has over 4,000 outlets all over the country. The company, however, hopes to make a small beginning in the south and observers believe this could be in the consumption zones of Karnataka and Andhra Pradesh.

MRPL has been going through hard times because of wafer-thin refining margins and a skewed import duty structure on crude and products. The only way it can set right the balance is to go in for direct marketing of products by the time APM is completely dismantled in April 2002 or even earlier should the ministry decide that this is a better option.