Even as the oil sector stands deregulated from April 1, 2002, Petroleum Minister Ram Naik has asked the public sector oil marketing companies to put their retail marketing development plans on the hold.

In a verbal direction to the oil public sector undertakings, Naik said they should stop all activities connected with the setting up of new retail outlets. He said no new petrol pumps should be commissioned by these companies.

While Naik is learnt to have cited the petrol pump allocation controversy and the subsequent court cases as the reasons for his 'advice' to the oil companies, the latter see it as an undue interference in their working by the minister when the government no more controls the sector.

Officially, the ministry cannot interfere with the functioning of the decontrolled oil PSUs. Naik, therefore, chose to issue only verbal instructions in this regard.

"Since the directive is only to the public sector companies and not the private companies, the latter can always go ahead and occupy prime sites for their retail outlets. Later, when we want to put up our petrol pumps, it is possible we are left with no worthwhile locations," said a senior PSU official.

At a recent meeting, the minister is learnt to have expressed his ire against the oil PSUs continuing to allot petrol pumps despite the court cases following the controversy surrounding the earlier allotments made by the National Democratic Alliance government.

Naik was told at the meeting that while IBP Company Ltd, a wholly owned subsidiary of Indian Oil Corporation, had made around 300 allotments in the past six months, some other PSUs have also been issuing letters of intent for retail outlets.

The minister was also informed that many of the letters of intent had already been implemented and petrol pumps had come up at new sites.

IBP's modus operandi in this has been quite simple -- issue the letter of intent, expedite all the necessary clearances, put up at least one dispensing unit at the site and start operating the outlet within less than a month of the issue of the letter of intent.

An IBP representative at the meeting disclosed that the decision to issue the letters of intent was taken by the board of the company on which the government also had its representatives.

The issue came up once again at the consultative committee meeting where some members supported oil PSUs for carrying out their marketing development activities despite a setback to the government on the issue of petrol pump allocation.

The members are learnt to have said a pre-emptive action by oil PSUs in this regard is essential to meet the challenges of a deregulated petroleum market.