Still no agreement on tariff for Mangalore-Bangalore pipeline

Vol 7, PW 7 (18 Jun 03) News in Brief

On Thursday 19th June Petronet-India's 362-km product pipeline from Mangalore to Bangalore through Hassan will begin operation when Hindustan Petroleum pumps in 80,000 kilolitres of diesel at Mangalore.

Earlier disagreement between HPCL, BPCL and IOC over the cost of the Rs150cr ($31m) "line fill" had been holding up operation. But in a recent compromise, the three have refiners agreed to split the cost in proportion to the products they pump into the pipeline.

Still in dispute is the pipeline tariff. IOC insists it should be 70% of rail freight but Petronet-India wants it to be 90% of rail freight.

In a 12th June presentation to the oil ministry, Petronet-India argued: "There is no logic in IOC's demand. If it is accepted the pipeline will be economically unviable."