06 August 2008;timesofindia.indiatimes.com : Sanjay Dutta: NEW DELHI: But for Cabinet Secretary K M Chandrashekhar's intervention, state-owned Bharat Petroleum and Hindustan Petroleum would have lost their Navratna status last month as a result of the government's policy of capping fuel prices despite runaway crude prices and keeping the companies afloat on dole.
The Navratna status gives state entities power to decide on their own projects of any size and invest up to Rs 1,000 crore in joint ventures without seeking government permission. This saves them from going through the cumbersome and time-consuming process of seeking government approvals which hampers progress of many other state firms.
At a recent meeting of the heavy industries department's apex committee on Navratna companies, Chandrashekhar put on hold an inter-ministerial panel's recommendation to put the two companies on notice. The inter-ministerial panel had recommended such a move after reviewing their performance during the last three years and a composite score card based on six selected operational parameters.
Both the companies managed to notch up only 58 on the composite score parameters, which was below the minimum requirement of 70. Their fall in the pecking order was essentially due to the support from the government they get by way of oil bonds and subsidies from domestic crude producers such as ONGC and Oil India for partially making up losses on fuel sales. Government support disqualifies state entities from Navratna status.
Oil ministry officials pointed out that the oil bonds and subsidies should not be construed as budgetary support as they were part of the policy to cushion consumers from high oil prices.
Even the finance ministry representative agreed with this. Chandrashekhar said the department should take a fresh look at the parameters in view of the government's fuel pricing policy.
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