Blame private refiners for LPG shortfall

Vol 4, PW 6 (26 Apr 00) Midstream & Downstream

India's oil ministry has made a veiled attack on the country's two private sector refiners, Reliance Petroleum and Mangalore Refineries & Petrochemicals, over last year's shortfall in the production of Liquefied Petroleum Gas (LPG).

In a statement released on 19th April, the oil ministry released the following figures showing how actual LPG production in India last year fell 760,000 tonnes short of the amount required. Target production Actual production State-owned refineries 1,723,000 tonnes 1,684,000 tonnes Joint venture and private refineries 1,785,000 tonnes 805,000 tonnes Fractionators 1,732,000 tonnes 1,991,000 tonnes Total 5,240,000 tonnes 4,480,000 tonnes It can be observed that the LPG production during the last year is lower mainly at Joint Venture Company and Private Refineries," reads the note, which makes no specific reference to Reliance or Mangalore Refineries, but as these are the only two private sector refiners in India, the inference is clear.

The oil ministry statement adds that it expects total production of LPG in India for the financial year until April 2001 to be 6,216,000 tonnes. It said the demand estimate for the same period is6,707,000 tonnes - a deficit of491,000 tonnes.

Hence to meet the domestic demand some imports would be made," adds the statement. Teething problems at Reliance's refinery at the time of its commissioning in the middle of last year are largely to blame for the company's inability to produce as much LPG as it would have liked.

A press report published in August 1998 said Reliance was hoping to begin producing 250,000 tonnes of LPG a year from its Jamnagar refinery by the middle of last year. Clearly, this did not happen.

Oil ministry figures published in Petrowatch Vol 4, Issue 1 (20-Table: All-India refinery capacity used April-December 1999) show that actual throughput at Reliance's refinery between April-December 1999 was only 6.35m tonnes of crude against a target of 10.7m tonnes.