PSUs pay less than market price for Jamnagar petrol

Vol 7, PW 2 (07 Apr 03) Midstream & Downstream

RELIANCE IS also angry over the price Indian state refiners pay it for petrol and diesel from Jamnagar.

According to Reliance, offtake agreements signed with IOC, HPCL and BPCL compel them to revise petrol and diesel refinery transfer prices every two weeks in line with market fluctuations. Under such a regime they would agree to paythe 'import parity' price at Jamnagar, calculated from global prices published the preceding fortnight.

Here too, says Reliance, state refiners are in breach ofcontract. "From 1st March 2003, oil companies have not revised the refinery transfer price of petrol and high speed diesel for supplies ex-Jamnagar and have retained the same at provisional transfer price pertaining to second fortnight of February 2003," it complains.

Since then, argues Reliance, international prices of diesel and petrol have gone up and oil PSUs have even hiked pump prices, winning on both counts. "Despite this, the refinery transfer prices have not been revised," snaps Reliance.

Reliance says it has billed PSUs for petrol and diesel based on "correct working of import parity price for the first and second fortnight of March," but that they are only paying the "frozen" refinery transfer prices. Clearly, Reliance is getting paid less than what it invoices.

These short payments, continues Reliance, also violate the offtake agreements for these products. To conclude: Reliance wants the ministry to tell the oil PSUs to honour the sales agreements, "signed with full concurrence of the Ministry of Petroleum and Natural Gas and settle all outstanding dues from them in this regard without any further delay."

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