Bharat Petroleum demands access to central India

Vol 4, PW 14 (16 Aug 00) People & Policy

Why is Bharat Petroleum so strongly opposed to the 'BOOT' proposal put forward by Reliance and IOC (See below: "16-Deadlock over Central India Pipeline") Because if accepted, this will deprive it of access to what will be the longest oil product pipeline ever constructed in India.

"With access to this pipeline you can dominate the whole of central India," reveals an observer, "Strategically it is very important for Bharat Petroleum that the 'Common Carrier' principle is applied." Contrast that with a 'monopoly' proposal put forward by Reliance and IOC and it is not difficult to see why Bharat Petroleum is putting up such a fight. Reliance and IOC want the Central India Pipeline to be their exclusive preserve, evacuating products only from Reliance's 27m tonnes a year refinery at Jamnagar in Gujarat and IOC's refinery at nearby Koyali.

Bharat Petroleum only has one refinery, a 6m t/y complex in Mumbai. But it plans to build a second 6m t/y refinery at Bina in Madhya Pradesh.

To survive in a deregulated market, Bina needs access to the Central India Pipeline. Determination by Bharat Petroleum chairman Sundararajan to block the Reliance/IOC proposal reflects a degree of confidence - however misplaced - that the Bina refinery will emerge, despite mounting evidence it is dead.

How will the controversy be resolved That's a question for the Indian oil ministry, whose job will not be made easier by the lack of regulation on which to base a decision. It is clearly time for the government to appoint a pipeline regulator.

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