Private oil companies, including Mukesh Ambani?s Reliance Industries Limited (RIL), Shashi Ruia?s Essar Oil and Shell India Marketing, have come together to file a joint petition against the PSU oil companies?Indian Oil, Hindustan Petroleum, Bharat Petroleum, ONGC and Oil India (OIL)?for indulging in unfair and restrictive trade practices in the sale of transportation fuels.
The case has been filed before the oil sector regulator, the Petroleum and Natural Gas Regulatory Board (PNGRB), where the complainants asked the regulator to initiate adjudication proceedings against the oil PSUs under Section 11 and 12 of the PNGRB Act.
The first hearing of the case took place on March 5, wherein the complainants sought directions to be issued to the PSU oil companies to cease their policy on ?predatory pricing of transportation fuels.? Sources said the PSU oil firms have sought four weeks to include government as a party in this matter.
In their petition (a copy of which is available with FE), the three corporate houses have charged Indian Oil, BPCL and HPCL of forming a cartel and for following restrictive and unfair trade practices in marketing and sale of petroleum products.
Upstream companies, including ONGC and OIL, have also been blamed under the law for supporting the OMCs and for extending subsidies in the form of discounts on crude oil sales.
When contacted, PNGRB chairman L Mansingh said, ?The regulatory board, under Section 11 A of the PNGRB Act, has been given the mandate to promote a competitive market and if a company complains of unfair trade practices, it has the right intervene in the government?s policy?On the complaint of the three private oil companies, a bench has been constituted to look into the matter.?
The private oil companies have charged the public sector OMCs with not rationalising the fuel prices in line with surging international crude oil prices. This, they said, could be considered as if the PSU oil companies have joined together with a view to eliminate the competition from the market. On his part, IOC chairman Sarthak Behuria said, ?All these charges are relevant in a free marketing regime. Where is that? So what they are asking us, they should ask the government.?
The present market share of the oil PSUs ?of 98.85% for diesel and 96.8% for petrol?makes it clear that the competition from the private sector has been virtually eliminated, they said adding that ONGC and OIL acted in concert with IOC, BPCL and HPCL by selling crude to these companies at reduced artificial prices.
?The policy of the government is to allow crude prices to be determined by import parity,? they said.
