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RPL complains to government, says being forced to export

Reliance Petroleum Ltd, India's largest private refiner, has complained to the government that it is being denied fair access to the controlled local market, forcing it to export at a lower price, a document obtained by Reuters shows.

In the year ended March, Reliance Petroleum exported 1.597 million tonnes of diesel and got Rs 4.68 billion less than would have been generated by local sales, the document said.

It also exported 1.128 million tonnes of motor spirit for Rs 470 million less than the local price, the document said.

Company officials were not immediately available for comment.

Reliance said other refiners are being allowed to sell all of their output in the domestic market while it was being singled out to export its products.

It said this was happening despite a government pledge to give it the same treatment as other refiners when it set up its 27-million tonnes a year refinery in western India in 1999.

Reliance's output accounts for a quarter of the total capacity of India's 17 refineries.

Petroleum ministry officials said the government was reviewing the firm's complaint. They would not comment on its allegations that the government had reneged on its promise.

Reliance could sell only 38 per cent of its motor spirit and 84 per cent of the diesel produced by its refinery in 2000-01 in the domestic market, the document said.

DIESEL DEMAND FELL

Reliance Petroleum's diesel export of 1.597 million tonnes represented the total of excess supply in India last year when diesel demand fell 2.8 per cent, it noted.

India, which has a refining capacity of 112 million tonnes a year, is expected to export up to 2.5 million tonnes of diesel and about three million tonnes of motor spirit this fiscal year, according to a government estimate.

Government officials said Reliance Petroleum also complained it was not being given timely information about India's crude import needs.

The document said refineries plan their crude oil supplies two or three months in advance but Reliance received the information on consumption changes so late it had to process the contracted crude and export it if local demand fell.

Price and distribution of diesel and petrol is controlled by the government. An official agency assesses the demand for petroleum products, estimates import needs, and tells refiners how much they should produce.

Only four state-run firms are allowed to retail petrol and diesel. These are marketing firm IBP Co, and refiners Indian Oil, Hindustan Petroleum Corporation and Bharat Petroleum Corporation.

Reliance has to depend on the government to retail its products in the local market until April 2002 when pricing and distribution controls will be lifted.

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