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RPL for equitable offtake of controlled petro products

Pradeep Puri

Reliance Petroleum Ltd has asked the government to treat private sector refineries at par with ones in the public sector, while deciding on the offtake of controlled products for domestic sales during the transition to complete decontrol of petroleum products.

RPL is making a presentation to petroleum minister Ram Naik on Thursday to press for "equitable domestic absorption of controlled products."

RPL has written to Naik that in February 1999, the petroleum ministry had advised that the private sector refineries of Reliance and Essar "would be treated at par with other PSU refineries in the country, in the matter of offtake of their controlled products during the transition period and that the total production of controlled products of Reliance and Essar would be included in the oil economy budget for the purpose of supply and demand management in the country." RPL further said that the ministry had also assured that "during the transition period, export of surplus, if any, controlled products of all the refineries will continue to be handled by Indian Oil Corporation, which will act as a canalising agency."

The company rued the fact that despite these assurances, inequities have occurred in domestic absorption of high speed diesel and motor spirit from RPL.

It has provided the government with data to highlight that the domestic absorption provided to RPL, especially for MS, is insignificant compared with the domestic absorption provided to public sector refineries.

RPL said that it had entered into a marketing agreement with IOC after obtaining the approval of the petroleum ministry, wherein its capacity was recognised at the level of 27 million metric tonne per annum.

"Even after the RPL refinery went on-stream in July 1999 adding 27 mmtpa capacity, a fact known to the government, PSU refineries were permitted to expand their existing capacities by 22 mmtpa. This additional capacity, which was created subsequently, has been given priority over RPL in domestic absorption," the company has written to the minister.

It also said that the least cost transportation model used by the industry has many inconsistencies. "These inconsistencies lead to aberrations and result in additional outflow from the oil pool account."

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