Indian Strikers Protest Oil Privatization


Citing national security concerns in Indias core hydrocarbon sector, workmen unions of Hindustan Petroleum Corp. and Bharat Petroleum Corp. embarked on a three-day strike March 25 to 27 to protest privatization of the two Indian oil majors.

Hindustan and Bharat together have a 40 percent share of Indias petroleum retail segment and 30 percent of the lube business. Hindustan alone has a 20 percent lube market share and commands 41 percent of Indias installed base oil capacity.

Currently, formal expressions of interest for Hindustan Petroleums strategic sale of 34.1 percent of its stock have reportedly been received from Reliance Industries, Shell, Essar Group, ChevronTexaco, Petronas, Saudi Aramco and Kuwait Petroleum. The Hong Kong and Shanghai Banking Corp. has been appointed global advisor. Bharat Petroleums advisor is yet to be appointed but it is learnt that 20 percent of its stake will be divested through international public issues and 10 percent through local sales.

The unions are against the government policy of selling high profit-earning corporations that additionally fulfill various social objectives. Spearheaded by the National United Forum against Privatization of Oil PSUs, an umbrella of 25 labor unions, the motivation was to draw public attention to the ongoing privatization process and not to disrupt the smooth flow of petroleum products, claimed forum coordinator Swadesh Debroye.

The Oil Sector Officers Association (OSOA) was also slated to join the strike, but withdrew at the nth hour in view of a High Court order prohibiting the strike. OSOA President Ashok Singh, however, underlined his groups complete solidarity with the workmen.

The unions are under no illusion that a three-day walkout will deliver the goods. Debroye, who is also National Secretary of the Center of Indian Trade Unions, felt the strike delivered a serious warning to the government. Soon the entire oil sector including workers of Indian Oil Corp., Oil and Natural Gas Commission, Gas Authority of India Ltd. and Oil India Ltd. will be involved, asserted Debroye.

There was little disruption in supplies as workers had topped up supply points and management employees were filling in for workers at refineries and plants. Hutoxi Panthaky, chief manager for public relations at Hindustan Petroleum, felt that by and large everything ran smoothly. Bharat Petroleums spokesperson clarified: Except for pockets in West Bengal there was no major impact.

Just a day before the strike, stock prices of both corporations soared briefly on news of a Supreme Court clarification (in a petition filed by the All India Petroleum Traders Association challenging privatization) that the pending petition before the courts cannot be construed as a stay of the disinvestment process.

OSOAs Singh asserted that the Officers Association withdrew the strike call so as not to jeopardize its chances of future legal action. Since both Hindustan Petroleum and Bharat Petroleum were created by acts of Parliament, privatization should only follow the repeal of those acts, claimed Singh.

The Attorney General has already opined that this is unnecessary. Armed with a statement signed by three ex-Supreme Court judges, and an ex-Delhi High Court Judge, the Hindustan Petroleum Management Staff Association is preparing to petition the Supreme Court at the end of this week to direct the government to open the issue in Parliament. Were this to transpire, the government could receive a setback as the chief opposition party, the Congress, is unequivocally opposed to the sale.

The conflict in Iraq, with the feared rise in oil prices, may add yet another dimension to the notion of energy security and stability for India. Thus far industry sources attach scant importance to the rumblings of opposition. Citing annual financial closing on March 31, the Petroleum Ministry was unavailable for comment. Meanwhile, the unions and the officers association seem set to raise the heat.

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