We firmly oppose privatisation of Bharat Petroleum
Mazdoor Ekta Lehar (MEL) : Can you tell us about the National Convention of Oil & Petroleum Workers that was organised in Mumbai on the 26th of October 2019?
Comrade Subhash Marathe(SM) : This Convention was jointly organised by the trade unions of various affiliations as well as the unaffiliated ones functioning in ONGC, IOC, BPCL and HPCL and there was participation from representatives of the workers from the Oil & Petroleum Public Sector Units (PSU) from all over the country.
The convention was also attended by representatives of workers from Ordinance factories, railways, state transport, banking and docks.
MEL: What is the response of the Unions to the Governments announcement that it intends to privatise BPCL ?
SM: We the workers working in petroleum sector see that efficient, profit making PSU’s are made sick by the policies of the Government and then privatised.
The same is the case with the Oil and Petroleum PSU’s. The decision to privatise HPCL and BPCL was taken in 2016. At that time under the guise of repealing out-dated laws, the Central Government passed the “Repealing and Amendment Act” 2016. This Act annulled 187 obsolete and redundant laws lying unnecessarily in the Statute books”. Among the Acts that was annulled was the Act of 1976 that had nationalised the erstwhile British Company Burma Shell and the American Company Esso, and created BPCL and HPCL respectively.
In 2003 when the then NDA Government led by Atal Bihari Vajpayee wanted to sell off 34% of the Governments 51% stake in BPCL and HPCL to a strategic partner along with management control, the Supreme Court had stayed it saying that BPCL and HPCL can only be privatised after Parliament amends the Nationalisation Act of 1976.
Now after annulling the Act which Nationalised BPCL and HPCL, the Government plans to proceed to sell off both. It must be noted that when the “Repealing and Amendment Act” 2016 was passed in 2016, none of the workers working in the Oil and Petroleum Industry knew about this and this was not highlighted in the media nor even our unions were consulted. Hence the Government annulled the Act which nationalised BPCL and HPCL in a most undemocratic and secret manner.
The Convention in Mumbai on October 26th 2019, condemned the Central Government for its decision to privatise strategic PSU’s such as Oil and Petroleum, Defence, Public Sector Banks, Insurance, Railways, Ports, Public Road Transport etc.
MEL: What are the physical assets of BPCL ?
SM : BPCL has four refineries with total installed capacity of 38.3 MMT (Million Metric Tons) per annum. These are at Mumbai, Numaliger (Assam), Cochin and Bina (M.P). It has 77 major installations and depots for storing and distribution of petroleum products, 55 LPG bottling plants, 2241 km multi product pipelines, 56 Aviation Fuelling stations in Airports, 4 lubricant plants and lubricant go downs and facilities for loading and unloading crude and finished products in major ports. Moreover it has 11 subsidiary companies in India and abroad and 22 Joint Venture companies. In addition there are huge land holdings of BPCL in prime locations of metropolitan and other cities all over India. BPCL is having more than 24% market share in the Petroleum Products Marketing in India.
A very important asset of BPCL is its long standing ‘Brand Value’. According to the survey of ‘Expert Opinion’ by ETEnergy world, ‘BPCL has an opportunity to become the second largest fuel retailer in India“.
At present BPCL is executing projects costing more than Rs 48,182 crores all over the country including the 6 MMTA Expansion project at Numaligar Refinery. BPCL has been awarded status of Maharatana Company since 2017. Among the 4 oil companies, BPCL, HPCL, IOC, ONGC, BPCL is the only company given this title.
MEL: What is the financial strength of BPCL?
SM: Right from its inception BPCL has contributed to the National exchequer by way of dividend, direct and Indirect taxes, Sales tax etc . Net profit (profit after Tax) earned by BPCL during the financial years 2014-2015, 2015-2016, 2016-2017, 2017-2018 and 2018-2019 have been Rs 5,085 crores, Rs 7,056 crores, Rs 8,039 crores, Rs 7,976 crores and Rs 7,138 crores respectively. BPCL has paid more than Rs 15,000 crores as dividend during the last four financial years. In the last financial year itself, the taxes paid to the National Exchequer by BPCL was around Rs 96,000 crores. Also BPCL is having reserves and surplus of Rs 34,000 crores. The real value of the assets of BPCL is more than Rs 2 lakh crores.
MEL : What is the situation in HPCL?
SM: HPCL has a refining capacity of 18 MMT. The net sales of the company was Rs 3 lakh crores last year while the profit earned was Rs 7,218 crores.
In 2017, the Central Government forced ONGC to buy the total residual 51.1% Government equity in HPCL at an abnormally high price of Rs 36,915 crores. The Government did this in order to meets its disinvestment target for 2017-2018. However this deal has adversely affected ONGC, which from a debt free company became a debt laden company with no cash reserves on its books. ONGC had to take a loan of Rs 25,000 crores to buy the Governments equity in HPCL. It is very probable that ONGC will soon sell off its stake in HPCL to some private company, Indian or foreign.
MEL: How many workers are employed in BPCL and HPCL?
SM: In BPCL, there are 12,000 permanent workers and 20,000 contract workers. In HPCL there are 11,000 permanent workers and 31, 000 contract workers. They have been trying to reduce the permanent employees and increase the contract employees and for this they have offered VRS three times already.
MEL: Who do you think are likely to buy BPCL or HPCL?
SM: When the Atal Bihari Vajpayee led NDA Government tried to privatise BPCL and HPCL in 2002, Reliance Industries, BP of UK, Kuwait Petroleum, Petronas of Malaysia, Shell –Saudi ARAMCO combine and Essar Oil had shown interest. However as explained earlier the opposition of the workers as well as the judgement of the Supreme Court had stopped the privatisation.
Already foreign private Oil and Gas Giants have penetrated the Indian Market. Recently the French Giant , Total SA, announced the acquisition of 37.4% stake in Adani Gas, which retails compressed natural gas to automobiles and piped cooking gas to households besides developing import terminals and a national chain of petrol stations.
The British Giant, BP Plc, has 30 % stake in Reliance Industries operated oil and gas blocks. Besides they have entered into a joint venture to set up 5,550 fuel stations across the country. Reliance has announced Saudi ARAMCO’s plan to pick up a share of its refining and petrochemicals assets in Gujarat for over Rs 1 Lakh crore. Early this year Canada based Brookfield Asset Management’s India Infrastructure Trust acquired Reliance’s loss making East West Pipeline for Rs 13,000 crores. ONGC has signed a Memorandum of Understanding (MoU) with US Giant Exxon Mobil on October 14th 2019 to co-operate in exploration and production.
It is clear that Reliance Industries in collaboration with one or more foreign oil giants named above will buyout BPCL and HPCL if the united opposition of the PSU workers and the joint trade union movement cannot stop it.
MEL: What is the adverse effect of privatisation of the oil industry?
SM: Today Reliance Industries Ltd.(RIL) present refining capacity is 62 MMTA. If BPCL and HPCL are captured by RIL, its total refining capacity will jump to 120 MMTA making it a monopoly oil refining industry in our country.
Today more than 75% of Indian fuel marketing business is owned by three PSU’s , IOCL, BPCL and HPCL. Based on this strength the Government has scope to control fuel pricing. But once the controlling power is surrendered to RIL or foreign oil giants , we can easily imagine how the prices will start skyrocketing in the country.
Besides we should remember the circumstances in which the then Burma Shell and Esso were nationalised in 1976 and made into BPCL and HPCL. In the 1971 Indo Pakistan War, the British Company Burma Shell closed its ATF (Aviation Turbine Fuel) production facilities in India. This starved the Indian Air Force of fuel required for its fighter jets. It was Iraq which came to India’s rescue at that time by supplying ATF. It was because of this that the Government decided to nationalise the oil and petroleum refining industry afterwards. And now forgetting the lessons of the past, the Government is selling out the oil and gas industry once again to private players.
In addition the working conditions of the large number of workers in the oil and gas industry in India will sharply deteriorate once they are taken over by private players. They will only employ fixed term contract workers with increased workload and lower wages.
MEL: What is your program of action to oppose this privatisation?
SM: The Convention on October 26th 2019 decided on the following action plan and called on workers of BPCL and HPCL to actively take part in it. It asked the entire oil and petroleum PSU workers to give active solidarity to the action program as well as appealed to the Ten Central Trade Unions and National Federation and Confederations Joint Platform to extend support.
- All Unions at various BPCL and HPCL units all over India to convene GBM’s (General Body Meetings) of permanent and contract workers by 5th November 2019.
- All Unions to serve strike notices on 11th November 2019.
- Observe All India Protest Week by organising rallies, processions, gate meetings during 11th to 17th November 2019. Postering and leaflet distribution among workers, their family members and the general public.
- With wider participation, next national convention of Petroleum workers at New Delhi on 20th November 2019. Central Trade Union leaders and MP’s will be invited to address.
- Massive day long dharna at the gate of all refineries, Regional HQ’s and all other work locations of BPCL and HPCL throughout India on 26th November 2019.
- One day token strike on 28th November 2019 by all Refinery, marketing and pipeline workers of BPCL and HPCL all over India.
- If the Central Government still goes ahead with its privatisation plans, then strike action on multiple days will be decided to stop privatisation by all means.
MEL : Thank you for this interview and we fully support your struggle and through our paper we will spread it across India.