Sensex Lower Amid Consolidation As Investors Await RBI Policy

The proposed merger of state-owned oil companies could reduce inefficiencies across the sector and create an entity better placed to compete globally for resources, Fitch Ratings said today.

"However, a merger would face significant execution challenges, particularly in terms of managing the integration of employees, addressing overcapacity in the merged entity, and winning the backing for the merger from private shareholders," the rating agency said in a statement.

More than 12 years after a proposal to merge oil PSUs was first mooted by the then Oil Minister Mani Shankar Aiyar, Finance Minister Arun Jaitley in his Budget for 2017-18 last week, proposed to "create an integrated public sector 'oil major' which will be able to match the performance of international and domestic private sector oil and gas companies.

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