Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation (IOC) should not buy equity of each other and the money could instead be used for expansion to meet the further challenges in post deregulated scenario from the year 2002.

Sengupta said that he would be submitting his report on restructuring, particularly on the stand-alone refineries, by middle of March, instead of early stipulated February end.

ONGC and IOC are buying government equity for 10 percent cross holding as part of move to synergise operations to face global competition besides each acquiring five per cent equity in Gas Authority of India (GAIL).

The government is likely to mop up about Rs 4,000 crore through this. Sengupta said that prices of these scrips had also not improved despite the decision for thecross holding.

Asked if he would suggest merger of stand alone refineries with some existing oil marketing companies, he said "we are also looking at the international trends, but nothing can be said until the report is submitted."

"We have two other internal meetings on March third and 11 and I hope that I would be able to submit the report to the government by the second week of March," director general of Indian Institute of Management, Sengupta told PTI.

The petroleum ministry had set up the committee to suggest ways of restructuring the oil industry especially the stand-alone refineries like Cochin refineries (CRL), Madras Refineries (MRL) and Bongaigaon Refineries (BRPL) so that this sector was not adversely affected owing to the charged scenario after the year 2002.

Sengupta, however, declined to give details of the recommendations to be made by the committee saying, "we are taking into account all the possibilities of making the Indian oil sector competitive in the domestic and theinternational market."

Stand-alone refineries like CRL, MRL and BRPL totally produce about 16 million tonne of crude every year and in case of a merger of these refineries along with HPCL or Bharat Petroleum would mean a substantial amount of crude being produced in the country, industry sources said.

The petroleum ministry was in favour of merging these stand alone refineries with HPCL and BPCL keeping in account mergers in oil industry taking place world over, they said.