The Indian Oil Corporation (IOC) recently made headlines when the Adani Group signed a deal to offer regasification services at their LNG import terminal. In Kerala, they roped in women beneficiaries to promote LPG usage in rural settings. Despite a number of initiatives taken by IOC, it seems to be sliding down with losses and tumbling shares. In a year, IOC has witnessed the price of its shares fall by almost 28% (between April 25, 2017, and April 19, 2018).
Even now, they have to compromise with the damages brought forth by the recovery of global crude oil prices. This is being done in accordance to the Center’s directives, who want state-owned petrochemical companies like IOC, Bharat Petroleum (BP), and Hindustan Petroleum (HP) to absorb the loss up to Re 1 per litre on petrol and diesel sales.
Reports suggest that it is a move to keep petrol and diesel prices in check. Rise in the prices of petrochemical commodities can severely affect the current government’s performance in the next elections.
The current scenario of IOC is also due to the rise of ‘pass the buck’ culture in the company. The price of petroleum and shares is also somewhat connected to the efficiency of the organization, and the influence can be seen clearly. Online reviews of IOC cite lack of creativity in the organization, delayed work, and a slow workflow. It’s almost the same with BP and HP.
IOC needs to urgently revamp its gears and its public image. Most importantly, it needs to bring a change to structure, take up new projects and expand their influence in the petrochemical market. As mentioned before, IOC signed a deal with Adani Ports and Special Economic Zone, under director Rajesh Adani and Chairman Gautam Adani. It needs more of such deals with companies like Reliance Petroleum, Tata Petrodyne, and Essar Oil.
IOC needs to work closely with private organisations, possibly undergo part-privatisation like the Delhi Vidyut Board. However, it must not fall to the whims and greed of private entities.
The fall in share prices and profits can be stopped if revenue collection isn’t sluggish and the organisation restructures itself. Creative, productive, and bankable ideas need to be pushed to the forefront because IOC needs them desperately right now. Hopefully, it will reduce the petrochemical tariffs as well, in addition to restoring the faith people had lost in IOC.
Published by Kaushal Shah