The Cabinet Committee on Economic Affairs is meeting here on Thursday to consider the proposal of the Oil and Natural Gas Corporation to acquire the Aditya Birla Group's shares in Mangalore Refinery and Petrochemicals Ltd.

The proposal was cleared by the Public Investment Board last month after the government insisted the deal should be cleared before the corporation invested in the loss-making nine million tonnes per annum refinery.

The government had said though ONGC enjoyed a Navratna status, it could not invest more than Rs 200 crore (Rs 2 billion) in a joint venture without the prior approval of PIB.

ONGC is planning to invest Rs 60 crore (Rs 60 million) in buying the 39.37 per cent equity of MRPL held by the Aditya Birla Group at Rs 2 a share, and infuse Rs 600 crore (Rs 6 billion) as fresh equity in the joint venture to gain management control of the refinery.

The total investment by ONGC in MRPL, therefore, comes to Rs 660 crore (Rs 6.6 billion), which, according to the government, needed PIB scrutiny.

ONGC had planned after the proposal was cleared by the Cabinet Committee on Economic Affairs, it would acquire MRPL at the earliest so that it could start processing crude at the refinery and enter the lucrative retail sector through the acquisition of public sector Hindustan Petroleum Corporation Ltd.