The Telegraph
Since 1st March, 1999
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Shackles off oil marketing

New Delhi, Sept. 6: Even as petroleum minister Ram Naik slugs it out with disinvestment minister Arun Shourie over the privatisation of state-run oil companies, a high-powered panel on foreign direct investment headed by Planning Commission member N. K. Singh has recommended opening up oil marketing to 100 per cent FDI.

The report may also bolster disinvestment minister Arun Shourie’s arguments that security concerns being raised against selling oil PSUs are irrelevant in the new scenario. The Singh committee has said the petroleum regulator could address all security-related concerns and force oil companies, including MNCs to act in the national interest, adding that leaving 26 per cent with Indians to block special resolutions “will serve no useful purpose.”

The panel also argued that the move to allow greater FDI in various sectors will encourage foreign players who would be attracted to bid for the state-run companies being put up for sale. “If a clear signal is given that foreign companies are not only allowed but also encouraged to bid in disinvestment auctions, this could attract a significant amount of FDI,” the Singh panel report said.

The panel has argued that 100 per cent foreign investment in the petro sector would not only bring in more hard currency but also increase competition, leading to dissipation of fears of private monopolies replacing state monopoly in the sector.

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