New Delhi: The Indian Oil Officers’ Association (IOOA) and a coalition of central trade unions have raised strong objections to Indian Oil Corporation Ltd’s (IOCL) decision to restructure its pipeline operations and the Petroleum and Natural Gas Regulatory Board’s (PNGRB) move to declare its petroleum product pipelines as common carriers. In letters to the IOCL management and Petroleum Minister Hardeep Singh Puri, the groups warned that the changes risk undermining operational integrity, safety, and India’s energy security.
In a letter dated July 7, the IOOA said the restructuring effort, pushed under the banner of “synergy” and “cost competitiveness,” has triggered widespread unease. “What we are witnessing is a disturbing lack of transparency around the Independent/Common Carrier pipeline framework,” the association wrote. Officers have demanded clarity on the legal and regulatory status of the proposal, full disclosure of correspondence with PNGRB, and a joint meeting with the PSU's management.
A day later, on July 8, central trade unions including INTUC, AITUC, CITU and HMS wrote to Petroleum Minister Hardeep Puri, calling for a halt to the merger of the pipelines division with the marketing division to create “synergy.” They warned that a thinner operations team, split responsibilities, and reduced technical oversight could delay emergency responses and increase the risk of catastrophic pipeline incidents in densely populated areas.
The letter stressed that hydrocarbon pipelines require specialised institutional knowledge, and any dilution in safety practices “can have catastrophic consequences” for lives, property, and the environment.
The disquiet comes at a time when the government and PNGRB are advancing a broader policy shift toward open-access, shared energy infrastructure. The draft Petroleum and Natural Gas Rules, 2025, circulated earlier this month, explicitly mandate the sharing of petroleum infrastructure to enable equitable access. These rules complement PNGRB’s long-standing efforts to convert IOCL’s historically captive pipelines into common carriers.
In its official Action Plan 2025–26, PNGRB reinforced this direction, stating its intent to “identify high-volume corridors” for petroleum product movement and promote pipeline-based transportation on a common carrier model. The regulator also aims to conceptualise a National Product Pipeline Grid and explicitly promote a modal shift from road/rail to pipelines, engaging with oil marketing companies, refineries, and private players to anchor demand for shared infrastructure.
An internal IOOA report, accessed by PSU Watch, warns that the common carrier designation could force IOCL to open nearly half of its 80-million tonne pipeline capacity — about 5,900 km — to third-party use. This, it argues, would erode IOCL’s control over its strategic infrastructure and diminish the returns from assets that were historically developed for internal use.
Under the PNGRB’s new tariff regime effective August 2024, pipeline operators are allowed a regulated post-tax return of 12 percent, a shift from the higher internal margins IOCL enjoys under its integrated business model. The IOOA report cautions that this reclassification could make it “difficult, if not impossible” to plan new refineries without guaranteed evacuation infrastructure, thus jeopardising future investments.
PNGRB, on the other hand, has framed the common carrier model as essential to reduce redundancy in pipeline development, lower emissions, and increase competitive access — particularly for smaller private fuel marketers. The regulator believes that open access will lead to cost optimisation, improved infrastructure utilisation, and better service to high-demand clusters.
Its 2025–26 action plan reflects a proactive stance: enabling shared infrastructure, enhancing transparency, and gradually building toward a “One Nation, One Tariff” vision for pipeline logistics across India.
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