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ONGC to acquire HPCL, First Step towards an Integrated Supply Chain

ONGC acquiring HPCL will create an integrated supply chain for the upstream major and if this is followed by HPCL acquiring MRPL, ONGC will have a control over production till supply which will reduce the cost graph and increase profitability. This can help sustain the market vulnerability as ONGC with its new capital worth can follow in the footsteps of foreign giants and import heavily when crude prices are low and raise the domestic production when there is a price hike. With the first proposal of an integrated chain going back to 2004 and having been delayed till date, Govt should start taking definitive steps towards its completion as it is a win-win proposal for the entire chain.