The Union government is considering winding up of Petronet India Ltd (PIL) – a joint venture of three public sector oil companies – in view of PIL’s  functional redundancy.

The government has found the existence of PIL redundant since all oil companies are now allowed to construct pipelines on a common interest principle, as per government guidelines issued in December 2002.

Besides, PIL has failed to implement important projects such as the 1,760-km Central India Pipeline Project and the 523-km Chennai-Tirchy Pipeline.

PIL was set up in 1997 as a joint venture between IOC, HPCL and BPCL to set up pipelines so as to prevent wasteful duplication and spread economies of scale amongst interested parties. This objective has now been achieved with the government guidelines of December 2002 that permit any oil company to lay pipelines by accommodating all interested parties in the project.

Related News:

Petronet may shelve Central India Pipeline Project (11 April 2003)

New carrier norms for petro-pipelines by oil companies (5 December 2002)