Amid talks of merger of public sector
oil and gas companies, the government is considering a proposal to split GAIL (India) with the
marketing operations spun off into a separate company.
It is said the plan is being discussed
in the petroleum ministry as the Centre is unhappy with the state-run player's
performance in building a pipeline network in addition to a possible conflict
of interest in its role as the infrastructure provider as well as a
The discussions come at atime
when the government is working on completing ONGC acquisition of Hindustan PetroleumCorporation to bolster both the entities.
"It is like building a road and also deciding who can ply and at what
cost," said a source, who did not wish to be identified. The plan to split
the company, which was set up mainly to develop gas sector infrastructure in
the country, has been discussed in the past too, including by Atal Bihari Vajpayee government, but it did not materialise.
Natural gas transmission and marketing are the core businesses of the PSU, which has also
diversified into petrochemicals and renewable energy. Last year, GAIL earned
over 70% revenue from marketing operations, while over 40% of the profit came
from natural gas transmission.
The deal will help the government garner around Rs 35,000 crore by way of disinvestment
receipts. Though the government appears discussing the plan, sources said, no formal decision has been taken on this
issue; it will be finalized only after consultation with all stakeholders.