Secret product exchange deal sparks Reliance anger

Vol 5, PW 17 (10 Oct 01) Midstream & Downstream

What compelled Reliance to write to the oil ministry with a list of demands We learn the company became worried after hearing that Indian Oil, Bharat Petroleum and Hindustan Petroleum are discussing product exchange arrangements for the period 2002-04 and that Indian Oil has "tabled availability from Reliance at much lower levels (as) compared to oil economy budget, or OEB, 2001-02 as well as current levels of off-take by (oil) PSUs from Reliance." This despite a Reliance-Indian Oil agreement for the "post transition period" for marketing petrol, diesel, kerosene and LPG, so called "Controlled Products" where the retail price is fixed by the government.

Reliance argues it is unfairly treated from other refiners in India for off-take of 'controlled' products from its27m t/y refinery at Jamnagar. Petrowatch learns the Reliance-Indian Oil joint venture is still waiting for government approval.

See below: Product Reliance production as per OEB 2001-02 Indian Oil commitment pre-joint venture Indian Oil commitment post-joint venture LPG 2.296m tonnes 2.015m tonnes 1.620m tonnes Petrol 2.215m tonnes 1.740m tonnes 0.231m tonnes Kerosene/ATF/diesel 13.670m tonnes 11.700m tonnes 6.699m tonnes Total 18.181m tonnes 15.455m tonnes 8.551m tonnes