Royal Dutch/Shell has offered to sell its minority stake in a Czech oil refining firm to the state, a minister said on Tuesday, which could help a proposal for the government to gain more control over an integrated fuel sector.

Industry and Trade Minister Martin Kuba wants to push through a wider consolidation as part of a plan to increase the state's influence over loss-making oil refining and distributing businesses in order to prevent reduction or closure of refining capacity and ensure security of supply.

Shell has offered its 16.33% stake in Ceska Rafinerska. The refining firm processes crude for its shareholders - Poland's PKN via its Czech unit Unipetrol, Italy's ENI with 32.44% and Shell. The two other shareholders hold rights of first refusal.

"The offer has been made, there have been some negotiations about that," Kuba told reporters on the sidelines of a conference, confirming an earlier media report.

Kuba has been pushing for a merger of state-owned crude pipeline operator Mero, which brings oil from Russia and the Mediterranean to Czech refineries, and Cepro, the owner of a pipeline and storage network for gasoline and diesel.

The Shell stake would be worth buying only under the wider sector consolidation plan, he said. It would give the government control of a vertically integrated operation from imports of crude supplies to refining to distribution.

The Czech oil refining sector, like many refiners across Europe, has been squeezed by low margins. Unipetrol took a 4.5 billion crown ($228 million) charge in 2012 related mainly to its 51% stake in Rafinerska and also shut down refining at its smaller Paramo plant last year.

Kuba said his plan might be submitted to economic ministers for consideration within about a month. He said he expected the Finance Ministry to have objections to the plan.

Shell stuck to a previous refusal to comment on the issue.

Ceska Rafinerska runs the 110,000 barrel per day Litvinov and the 55,000 bpd Kralupy refineries, which satisfy Czech domestic demand.

Shell has long been mentioned by sector players as a possible candidate to sell its stake.

Last year, Shell sold the state-owned Mero a 5% stake in the TAL pipeline, which brings oil from the Mediterranean port of Trieste to Germany. This helps the Czechs to access capacity in the link and bring in oil to the Czech pipeline network.