Privatisation of petroleum companies and opposition of workers

Over 32,000 workers of Bharat Petroleum Corporation Limited (BPCL) will be on a two day All India strike on 7 and 8 September to oppose its privatisation. They include over 12,000 regular workers, and 20,000 contract workers. The strike call has been given by the All India Coordination Committee of BPCL Workers, consisting of over 22 unions of BPCL.

BPCL is a profit making public sector petroleum refining company. It is the third largest in terms of oil refining capacity and second largest in terms of fuel market share (25% of the market). It has four refineries at Mumbai, Kochi, Bina and Numaligarh.

The Central Government approved the sale of BPCL in November 2019. The decision was met with powerful protests by all the unions of petroleum companies — Oil & Natural Gas Commission (ONGC), Indian Oil Corporation (IOC), Hindustan Petroleum Company Limited (HPCL), Oil India and BPCL.  In October 2019, before the formal announcement of privatisation, the workers’ unions held a joint convention in Mumbai to expose and oppose the privatisation plans of the government. Since then, petroleum industry workers have been carrying out numerous agitations all over the country.

In Kochi, the powerful unrelenting protest of workers has forced the Kerala Assembly to pass a unanimous resolution to oppose privatisation of the Kochi refinery. The Kerala State Government has announced that it will legally challenge the transfer of land allotted for use by a public sector company to a private one.

Even though the central government announced that Numaligarh refinery in Assam would be separated from the rest of BPCL and sold to a public sector company, the workers of Numaligarh are continuing their agitation alongside of the rest of BPCL workers. They are opposing the privatisation and destruction of BPCL.

Despite the united opposition of workers, the Central government has gone ahead with inviting Expressions of Interest (EOI) from Indian and foreign private companies. It has also announced that no public sector oil company will be allowed to bid for BPCL.  The Union Petroleum Minister,  Dharmendra Pradhan, has ruled out reversing the decision to sell BPCL, saying “it is not the business of the government to do business”. This is a clear warning that the privatisation of BPCL is just one step in a plan to hand over the entire strategic petroleum industry to Indian and foreign capitalist monopolies.

BPCL pays more than Rs 17,000 crores as dividend to the Central Government. It has been estimated that the total value of BPCL is close to Rs 7 lakh crores. The Central government is planning to sell this precious public asset for less than 10% of its value. Clearly, enriching Indian and foreign capitalist monopolies by handing over the property of the Indian people to them, is what the Central government considers its “business”.

The petroleum monopolies in the race for taking over BPCL include Reliance Petrochemicals, Aramco (Saudi Arabia), ExxonMobil (US), Shell (British—Dutch), BP Plc (Britain), Kuwait Petroleum, Total SA (France) and ADNOC (Abu Dhabi). There are reports that the government is planning to hand over control of BPCL to Reliance in alliance with a foreign multinational. It seems to be part of the game plan to strengthen the strategic alliance with US imperialism.

Successive governments at the centre have been pursuing the path of privatisation of oil and gas exploration and refining over the past three decades. Indian and foreign capitalist monopolies entered the arena of exploration, drilling as well as refining. The process of selling of shares of state owned petroleum companies began. In 2016, under the guise of repealing out-dated laws, the Central Government annulled 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 January 2018, HPCL was sold to the public sector company ONGC. There are reports that immediately following the sale of BPCL, the government is planning to organise the sale of HPCL to a private capitalist monopoly.

The sale of BPCL to a private company, whether Indian or foreign, is against the interests of our people. Petroleum and natural gas are strategic resources on which the economy of our country critically depends.

BPCL focuses on production of LPG and bitumen even when both the products are subsidised. When a private company takes over BPCL, it will not produce LPG and bitumen. Driven by the sole aim of maximising profits, it will focus on products where there are large margins.

Today, more than 75% of Indian fuel marketing business is owned by three state owned companies — IOC, BPCL and HPCL. Once private capitalist monopolies capture a controlling share of the market, petrol and diesel prices will start skyrocketing.

The privatisation of refineries is against the interests of all sections of our people. It will lead to handing over control of prices of vital fuels like kerosene, petrol, diesel, LPG, etc to Indian and foreign monopoly capitalists. The struggle of petroleum workers against privatisation deserves the support of all workers, peasants and toilers of the country.

About BPCL

  • The British company Burmah Shell was nationalised in 1976 and named Bharat Petroleum Company Limited (BPCL)
  • BPCL has over 15,000 petrol pumps and 6000 LPG distributors.
  • It has 77 major installations and depots for storing and distribution of petroleum products.
  • It has 55 LPG bottling plants.
  • It has 2241 km multi product pipelines.
  • It has 56 Aviation Fuelling stations in Airports.
  • It has 4 lubricant plants.
  • It has facilities for loading/ unloading crude and finished products in major ports.
  • It has 11 subsidiary companies in India and abroad and 22 Joint Venture companies.
  • It has 6,000 acres of land across India, of which 750 acres is in Mumbai alone, valued in thousands of crores.
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