Commentators said the deal will not only create India's largest private company, it will also help Reliance compete against foreign multinationals such as Shell when the Indian oil industry is deregulated in April.

Last year Reliance failed in its bid to acquire fuel retailer IBP Ltd, however, the company will get a second chance when state-owned fuel retailers Hindustan Petroleum Corp and Bharat Petroleum Corp go under the hammer latter this year.