IOC-IBP merger to be tied up by Dec

The proposed merger between Indian Oil Corporation (IOC) and IBP would be over by December 2004, M S Ramachandran, chairman of IOC, said in Kolkata today.

Speaking to the media after the 96th annual general meeting of the company on Tuesday, Ramachandran said the suggestions from the consultants on merger issue would be available by next month and placed before the board by October.

Pointing out that the merger would be greatly beneficial for both companies, he said it would help the pure marketing company offset the loss due to high global crude oil prices. In the first quarter, IBP posted loss of about Rs 8 crore for the first time in its history.

"It is not doing well in the second quarter as well," Ramachandran said adding that it was in discussion with the Centre on this issue. It could be mention that IBP has asked for special compensation for marketing loss given the precarious nature of the oil marketing sector in the country.

"Other oil marketing companies can offset the loss by refining margin. But IBP being a pure marketing company, there is no such comfort. Thus, the merger with IOC seems to be the best option for IBP," he said adding that IBP is doing well as per as the physical performance was concerned.

He also allayed fears of some quarters that all the existing employees of IBP would be retained after the merger. Meanwhile, India's petroleum consumption is set to grow at four per cent this fiscal surpassing the earlier estimate of 3.7 per cent, Ramachandran said.

In the last fiscal, consumption grew by 3.5 per cent. He hoped the diesel consumption, indicator for industrial growth, would increase by 5-6 per cent this fiscal.