IOC Chairman Shrikant Madhav Vaidya Receives a One-Year Extension Following His Retirement

Shrikant Madhav Vaidya, chairman of the Indian Oil Corporation (IOC), has received a one-year post-retirement extension from the government, which is unusual for anybody on the board of a state-owned enterprise.

“The Appointments Committee of the Cabinet (ACC) approved the proposal of the Ministry of Petroleum and Natural Gas for the re-employment on a contract basis of Shri Shrikant Madhav Vaidya, Chairman, Indian Oil Corporation Limited (IOCL), with effect from September 1, 2023, until August 31, 2024, or until the appointment of a regular incumbent to the post, or until further orders, whichever is the earliest,” an op-ed from the ministry stated.

On Monday, Vaidya, who assumed leadership of the IOC on July 1, 2020, turned 60. Per the regulations, he was supposed to retire from his position at the end of the month. But as of right now, he will remain in his position as CEO of India’s biggest oil business for another year.

This is one of the extremely few times that a PSU director on the board has had his tenure extended above retirement age.

In recent years, no Maharatna PSU chairman has received an extension over 60 years of age. Ranjan Kumar Mohapatra was actually refused an eight-month extension as director (human resources) of IOC till he reached retirement age earlier this year by the government.

The managing director of Chennai Petroleum Corporation Ltd (CPCL), Arvind Kumar, was among the applicants interviewed by government recruiter PESB in May, but no recommendations for the position of IOC chairman were made as a result. The oil ministry thus suggested that Vaidya’s contract be extended.

“The Board did not recommend any candidate,” the PESB stated in an order on May 16 following the interview, “and advised the Ministry of Petroleum and Natural Gas to take an appropriate course of further action, including search-cum-selection committee or as deemed appropriate for the selection with the approval of the competent authority.”

This is the second time in recent months that PESB failed to locate a qualified candidate for the top position at prestigious oil corporations and instead gave control to retired staff.

Nine applicants, including two active IAS officials, were considered by the PESB on June 3, 2021, but none of them were deemed qualified to lead ONGC.

The government then established a search-cum-selection team and appointed Arun Kumar Singh, who had left Bharat Petroleum Corporation Ltd (BPCL) after turning 60, to lead ONGC. Singh wasn’t qualified to apply in the first place, but the modified guidelines qualified him.

Ten applicants were interviewed by PESB in May to replace Vaidya. Since none of the current IOC directors had the necessary two years of service remaining before retiring, none of them applied. Only Director (Marketing) Satish Kumar Vaduguri, one of the six directors, will remain in office for a maximum of 23 months before retiring in July 2025.

Only two other directors, Sukla Mistry for refineries and Sujoy Choudhury for strategy and business development, are on the IOC board in addition to Vaduguri.

Director (research and development) S. S. V. Ramakumar and Director (pipelines) D. S. Nanaware departed recently, leaving the positions of director (finance) and director (human resources) empty for months.

IOC refines crude oil to provide fuels for aircraft turbines as well as gasoline, diesel, and liquefied petroleum gas (LPG). Additionally, it produces petrochemicals and sells CNG.

In addition to providing the bulk of India’s fuel needs, IOC is a key player in the country’s energy transition, which involves moving away from fossil fuel-based systems of energy production and consumption including oil, natural gas, and coal and toward lithium-ion batteries, wind power, and solar power.

With a total capacity of 80.6 million tonnes, IOC’s ten oil refineries account for about a third of India’s 251.2 million tonnes of refining capacity. Out of the 86,855 gasoline stations in the nation, it also owns 36,285 of them. Additionally, it controls half of the 25,386 LPG wholesalers in the country. It manages 131 of the nation’s 283 aircraft fueling facilities.

Mohapatra was named director (HR) of the IOC in February 2018 for a five-year tenure that may be extended till he reached the age of 60. On December 31, 2023, he would have been 65 if he had been born on January 1st, 1964. On February 18 of this year, his five-year tenure came to an end, but he remained a director on the firm board in the absence of any advise for an extension.

IOC was then informed by the Oil Ministry that Mohapatra would not be granted an extension till the age of 60.