The only thing constant is change. Somewhere in the 2020s, experts had a vague inkling that Oil & Gas PSUs, as we know them, maybe heading for a short and swift death. A lucrative and blue eyed darling of a bygone epoch was in for a quiet burial.
Most citizens, including PSU employees, too busy with their daily grind, still do not see it coming. Many feel, it’s a given, something to be taken for granted. Why bother? If changes are due, so be it. Maybe it’s for the better, but is it really so? The swift and singlemindedness has caught even the experts unaware. There is something uncanny, which makes some afraid, very afraid.
The current generation may not remember much about the mixed-market economy. Not many care if India is hurtling towards merchant capitalism. India, is not a fully developed capitalistic state and may never be. Breaking down one of India’s most efficient, profit making and productive PSU sector could be justified as a necessity of current times.
If for nothing, then for the experimentation alone. Passage to a shining new India. Bureaucrats have long been suggesting that all PSUs need to be privatized. It was far easy to sell family silver than to painstakingly build a world class edifice. In any case, a father may have a longing for a house build by him brick by brick the sons should certainly not be compelled to share that sentiment. And this is business profits is everything! The quip that Government has no business to be in Business becomes the principle. And there is this vexatious issue that there are hardly any takers for loss making PSUs.Look, Air India was certainly not an exception. Many argue, that it had awesome value in terms of Aircrafts, Real Estate, Allotted Routes (including international ones), difficult to obtain Parking Slots, Necessary Licenses, Well Trained Pilots, Cabin Crew, Operations & Ground Staff, nostalgic Brand recall etc.
These values certainly are not amenable to customary monetization. The losses certainly are, on public display, market info and prime media. The current perception however is quite different. Many a well-known politician is loudly saying now, India should have its own national carrier and Air India should not have been privatized. In any case, it was probably not about privatization of a loss making Air India but a track change of enormous proportions. It was about dismantling of a system, although it had served people well, over the years. Therefore, it’s not about loss or profits actually. Oil PSUs have rarely made losses!
Do PSUs even deliver what they promise? Have the common Indians benefitted from them? Well it’s a debatable question. But one has to admit that PSUs did not have profits at the top of their mind, service was a more likely focus. We also know businesses can also suffer from quirks of life cycles. Well time has come for Corporates and mortals alike to recall John Donne’ poem – Therefore, send not to know for whom the bell tolls, it tolls for thee.
Indian Oil & Gas sector has not seen total monopolies for some time now. Currently consumers have been shielded from market related pricing of POL products largely due to a mechanism which shields them from a predatory market pricing, put into effect through Oil & Gas PSUs. This has put the Indian consumer in a relatively comfort zone. Pricing bands, determined by the government duly assisted by the Oil PSUs eased the burden on common man. Oil PSUs contributed towards GDP, Overall development, Paid Taxes faithfully, made Capital Investments, Supplied Subsidized LPG to below poverty line families, Reduced pollution, Generated Employment with equity, implementing Reservations, carried out CSR for weaker sections/reserved categories, while giving handsome dividends to the Government/ Shareholders.
Private players had a limited role to play in these matters. They were true to the refrain that they were in the Oil & Gas business not for charity. What Oil & Gas PSUs did was certainly not charity but nation building. Now developments have caught even the most Oil & Gas veterans by surprise, if not by the events, per se, then by the sheer width and speed of the sweeping changes proposed. One of the first salvos was in the form of a Public Notification dated 08.05.2025 of PNGRB, wherein it opined that it was necessary to declare Barauni – Kanpur Products Pipeline(1227KMs) as a common carrier or Contract Carrier Pipeline.
While most Oil & Gas observers were busy with ONGC Gas well blowout in Assam, Diesel mixed with water supplied to CM Madhya Pradesh’s Convoy, ONGC receiving Rs. 125 Crore GST demand, Reliance eyeing Rosnefts India stake etc. a major media house exposed that the Government had plans for Mega Reforms in Gas Marketing and Pipeline Infrastructure.
It was mentioned, plans were afoot to amend the PNGRB Act and empowering it to regulate Pipeline infrastructure of all types of energy sources. A Transport Systems Operator(TSO) would manage all common carrier Pipelines in India, even GAIL’s pipeline infrastructure was to be brought under TSO. Most observers state that making such radical changes in the existing Pipeline business & infrastructure ownership was nothing short of going for Oil & Gas PSUs jugular. Once divested of the crucial infrastructure which it had invested and constructed over long gestation periods these Oil & Gas PSUs would lose their position.
They may even become loss making/ sick companies. Private players would go for the market kill leaving PSUs extremely vulnerable. (This is somewhat confirmed by developments mentioned subsequently in this article). NewsIP also reported on July 4 (for details look up article link given below) that PNGRB had approved major reforms under second amendment to the Natural Gas Tariff Regulations,2025. PNGRB, which many till now, considered as a white elephant, was suddenly in the thick of things, full of fire and brimstone.
The compass is pointing towards widespread privatization in the Oil & Gas sector. It may be in a different avatar altogether not as is conventionally understood. Access, utilization and trolling of PSU infrastructure by Private Players would ensure that the stain associated with the word privatization is avoided.
In a well thought out masterstroke, the cake would be eaten and had too. PSUs had long enjoyed the patronage of the customers and government alike but winds of change were blowing. One observer humorously quipped a song by the famous band Queen – Buddy you’re a boy make a big noise Playin’ in the street gonna be a big man some day You got mud on yo’ face You big disgrace Kickin’ your can all over the place Singin’ We will we will rock you We will we will rock you. Anyway, connection to actions contemplated seems to be rather askew and piquant. NewsIP has long championed a cautious approach in the Oil & Gas Sector which touches the lives of 1.43 Billion Indians.
A slight mistake could send it hurtling. While India may like to flaunt its acreage in Offshore Energy Cluster in Bergen, Norway, many are skeptical that India has vast Oil & Gas reserves. Therefore, it will continue to import Oil & Gas to meet energy needs for a few decades more. Needless to mention, Indian energy security requires a much more measured and nuanced approach. Let’s not forget that India is going to become the largest consumer country of energy products, surpassing even China.
Although environment is a huge huge concern, conventional energy sources will continue to play a crucial role in India till infrastructure is in place. Even for renewables, alternates, nuclear energy sources PSUs seems to have been given a pass over. Private players seem to be preferred in the energy team. As it is, total annihilation of PSUs may lead to unchartered grounds especially in times of War, Natural Calamities and Epidemics. India is still by and large a poor country where the population still requires the support of the government for its daily needs.
Experts feel that the painstakingly built PSU infrastructure should not be handed over to Private players’ en masse. If the its done, a reciprocal arrangement of utilization of private entities infrastructure would only be just. The Oil PSUs have been profitable and at the forefront of implementing government policies. There has always been a din for Pipelines, Tankages, Aviation facilities etc. of PSUs to be shared. The ball was set in motion when JVs were formed for Aviation business.
Now IOCL has abolished Director (Pipelines) post; many say D (R&D) and D(BD) would be next. It’s a fact that gradually Oil & Gas PSUs which were the blue eyed boys of the energy sector are losing their sheen. They have lost market share, not invested appropriately on new energy sources and have a somewhat demoralized workforce.
There are rumors that Petrol & Diesel is being sold at Private Company ROs at cheaper rates and rumors being floated that PSU ROs sell adulterated fuel. Private players, hitherto concentrating on exports and trading in Crude have made rapid inroads in the domestic market. If PSUs get divested of Pipelines, Tankages, Expert Manpower and forced to share facilities, time is not far when they will become loss making. At best their role would be reduced to that of Vendors supplying to giant Private Sector Companies & MNCs.
The Top Management of PSUs have been trying to paint a much rosier business picture, need for synergy in manpower rationalization etc. their voices are sounding a bit shrill. Of course PSUs are lucky to have employees who are disciplined and follow orders even in tough times. Nevertheless, there are pockets of opposition. The Union of Indian Oil Corporation Ltd. Pipeline Division had given a Strike Notice which has now been postponed through efforts of the Chief Labor Commissioner.
The Indian Oil Officers Association has also written to the management regarding its concern on independent common carriers. The fear of monopolies & oligarchs ensconcing themselves seems to be troubling even experts. One shared that Reliance Industries has even thanked Chairman PNGRB for considering several Pipelines as Common or Contract Carrier Pipelines. For the common Indian Citizens, maybe, the silence of the lambs will bring good tidings.
Readers are requested to also look up the following reports.One Nation, One Grid, One Tariff: PNGRB Approves Major Reforms in Natural Gas Pipeline Tariff Regulations
India unveiling far reaching reforms in Oil Gas Sector
ONGC RIL and BP Sign New Exploration Deal
Kite Flying over Oil & Gas Fumes?
