BPCL plans merger with KRL

The proposal to merge KRL was put on the back-burner earlier due the divestment proposal of BPCL itself. BPC holds 55 per cent stake in Kochi Refineries and is implementing a Rs 180-crore modernisation plan. KRL which is operating a refinery has not diversified into marketing.

Behuria said the customs and excise duty cut on petroleum products by the Centre has only partially assisted oil companies in maintaining prices in the domestic market. However, the prevailing domestic prices would be inadequate to cover costs, if international prices keep ballooning in the days to come.

The major increases in the international oil prices, coupled with maintaining prices of major retail products for the customers, has put substantial pressure on the marketing margins. This has resulted in gains for the refineries at the cost of the marketing companies, he added.

BPCL is also seeking additional term supplies of crude oil from Malaysia and eyeing a contract with Libya to reduce its dependence on the Middle East, Behuria said.

‘‘We are trying to increase our spread, moving away from West Asia. It is basically an oil security issue. We don’t want to be vulnerable,’’ he said.

Its term supplies, mainly from Saudi Arabia and Kuwait, account for more than 70 per cent of imports. Behuria said BPCL had not received much crude from Iraq. Exports from Iraq have been hit by regular attacks on the country’s oil infrastructure. Behuria said BPCL was also seeking low-sulphur West African crudes. India imports 70 per cent of its crude oil requirement, mostly from West Asia.