The road ahead

Calcutta, May 2: IBP Ltd, the only PSU oil company with headquarters in the city, was today merged with Indian Oil Corporation (IOC).

The Union ministry of company affairs gave its final approval to the scheme of amalgamation on April 30.

According to the scheme, IBP shareholders will get 110 shares of Indian Oil for every 100 shares of IBP.

The record date for the share swap would be notified in due course, the company told the Bombay Stock Exchange.

An IOC official said this could happen as early as June.

The company and its board, however, stood dissolved from today. IBP will now become a division of IOC.

However, IOC plans to retain the IBP brand at 3,200 retail outlets across the country for sometime.

IOC bought the government’s share in IBP in 2002 and took control of the company. It said status quo would be maintained for the 2,200 employees of IBP.

As a result, every employee will continue working from his/her respective office.

Observers, however, believe the IBP division will be dissolved in the future. The marketing operations would then be handled by IOC state offices, they said.

Till that happens, the IBP division is likely to have its headquarters in Calcutta, a city where the corporate head office shifted 55 years ago.

IBP began its journey in 1909 as Indo Burma Petroleum Company Limited.

It was formed as a joint stock company and was headquartered at Rangoon in Myanmar.

In 1942, the British government decided to shift the headquarters to Calcutta so that its troops could destroy its only refinery at Rangoon, thereby denying the Japanese forces access to fuel.

It became a public sector company in 1974 under the ministry of petroleum and natural gas.

The Indo Burma Petroleum Company changed its name to IBP Co Limited in 1983.

It now remains to be seen whether IOC continues with the IBP brand, which enjoys a strong consumer loyalty.

Over the last few years, IBP’s financials weakened as it could not pass on the burden of high crude prices to consumers.