NEW DELHI, Sept 7: The privatization of assets of two Indian state-run oil firms was put off for three months on Saturday because of a row within the government, the Press Trust of India (PTI) said.

Prime Minister Atal Behari Vajpayee was due later Saturday to chair a meeting of the cabinet committee on economic affairs to discuss the proposed sale of Bharat Petroleum Limited (BPCL) and Hindustan Petroleum Limited (HPCL).

But PTI said that during an informal meeting of cabinet ministers earlier in the day Vajpayee failed to gain a consensus on the move.

At the informal meeting attended by senior ministers, it was understood to have been decided that the matter could be deferred for three months,” PTI said, quoting unidentified sources.

It said a formal decision was likely to be taken later at the committee meeting.

The government announced in February it wanted to privatise the companies as part of its plan to trim its budget deficit to 5.3 per cent of economic output in the fiscal year ending March 2003.

The government has so far only managed to raise one billion dollars from privatisation in the current year against a targetted $2.5 billion.

The state owns 51 per cent of HPCL and 66 per cent of BPCL, but the government did not say how much of companies it planned to sell.

Global energy giant Royal Dutch-Shell and Reliance Industries Limited, India’s biggest private company, have expressed an interest in bidding for the two companies.

But in recent weeks differences arose within the BJP-led ruling coalition over the sale.

First to oppose the sale was Oil Minister Ram Naik who favours a public offer while opposing the strategic sale of government equity in the two companies, which together control a 40 per cent share of the $15 billion domestic petroleum products market.

On Saturday, the Business Standard newspaper reported that Naik was likely to urge the cabinet committee to put off the sale of HPCL and BPCL citing the crisis between the United States and Iraq.

India imports 70 per cent of its crude oil and has suffered heavily due to volatile international oil prices in the past.

Among those opposed to the sale of HPCL and BPCL and privatisation in general are Defence Minister George Fernandes, Coal Minister Uma Bharti and Chemical and Fertilisers Minister Sukhdev Singh Dhindsa.

Fernandes believes the sale could be a threat to India’s energy security, especially at a time when India is involved in a military stand-off with neighbouring Pakistan over Kashmir.

On Friday, the BJP’s ideological mentor, the Rastriya Swayamsewak Sangh (National Volunteer Corps), joined ranks with those opposed to the disinvestment process.

The oil sector also comes under strategic sectors like defence, railways and atomic energy. The government should have control over this, RSS spoksman M.G. Vaidya said.

India’s privatization minister Arun Shourie admitted Thursday that the country’s ambitious policy had run into rough weather due to political differences within and outside the government.

The Economic Times noted that every minister was pursuing his own agenda with scant regard for the priorities of administration or reform.

—AFP