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IOC opposes allowing pvt cos to sell LPG to bulk customers
New Delhi, Oct 19: Indian Oil Corporation has objected to a proposal which, if accepted, would allow Reliance Industries to sell LPG directly to bulk customers, saying such a situation will have an adverse impact on state-run marketing companies and subsidy component without adding any value to the distribution system.
New Delhi, Oct 19: Indian Oil Corporation has objected to a proposal which, if accepted, would allow Reliance Industries to sell LPG directly to bulk customers, saying such a situation will have an adverse impact on state-run marketing companies and subsidy component without adding any value to the distribution system.
Petroleum Ministry has proposed to the Cabinet that
private refiners like Reliance be allowed to sell directly to
bulk customers after meeting the demand of state firms that
LPG (cooking gas) at subsidised rates, official sources said.
But IOC says that current indigenous production falls short of even the domestic demand and therefore imports are required to meet such shortfalls.
"Any marketing rights to producers for selling indigenous LPG to bulk customers would further increase the deficit in the product availability for domestic sector. This shall involve additional imports for domestic sector resulting in longer leads for transportation of domestic LPG with additional burden on exchequer/subsidy or increase in retail price," IOC says in response to Petroleum Ministry's Cabinet note.
Presently, private firms or so-called parallel marketers cannot source LPG from domestic refiners and have to import LPG for sale at market price to consumers.
Reliance is offering surplus LPG to private firms as an import substitute because of containment problem at its Jamnagar refinery during the lean demand season (April-September).
Bureau Report
But IOC says that current indigenous production falls short of even the domestic demand and therefore imports are required to meet such shortfalls.
"Any marketing rights to producers for selling indigenous LPG to bulk customers would further increase the deficit in the product availability for domestic sector. This shall involve additional imports for domestic sector resulting in longer leads for transportation of domestic LPG with additional burden on exchequer/subsidy or increase in retail price," IOC says in response to Petroleum Ministry's Cabinet note.
Presently, private firms or so-called parallel marketers cannot source LPG from domestic refiners and have to import LPG for sale at market price to consumers.
Reliance is offering surplus LPG to private firms as an import substitute because of containment problem at its Jamnagar refinery during the lean demand season (April-September).
Bureau Report