Oil marketing firms to buy less from Jamnagar plant

Oil marketing firms Indian Oil, BPCL, HPCL and IBP will together buy less petroleum products from Reliance Industries’ Jamnagar refinery because of preference to government-owned refineries.

The four will buy close to 4 million tonnes in 2004-5 instead of 13.1 million that they are buying this fiscal. The purchases would be confined to 2.5 million of LPG and a little over a million of kerosene, thereby ending purchase of diesel and petrol from the 33-million-tonne refinery. This would mean that Reliance, which is yet to set up its distribution network of retail outlets, would have to tap the export market starting April. The Jamnagar refinery produces four million tonnes of petrol and 11 million tonnes of diesel.

The low offtake from Reliance is a fallout of the Industry Logistics Plan for 2004-05 where the four marketing firms have to give first preference for purchase of products to state-run refineries.

On Wednesday, the four companies decided to lift more from Mangalore Refinery & Petrochemicals Ltd, as well as the expanded capacities of BPCL and Chennai Petroleum Corp (CPCL). MRPL’s refining capacity has been considered at 10.5 million tonnes instead of the previous 4.5 million while three million tonnes each were added on from BPCL and CPCL refineries. IOC currently buys 7.5 million tonnes of products from Reliance while the remaining 5.6 million is lifted in equal proportion by HPCL and BPCL.