BPCL Wants Export House Status For NRL

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New Delhi, July 20: : Bharat Petroleum Corporation Limited (BPCL) has sought a package of incentives from the Centre including the export trading house status for its Numaligarh Refinery Limited (NRL). This will help in exporting petroleum products to Myanmar.

In a letter to the petroleum ministry, BPCL has stated that the proposal to export petroleum products to Myanmar is economically unviable and entails very high level of under-recoveries. “As NRL is receiving only domestic crude oil, it is not in a position to avail any export incentives like advance licenses. Besides export of fuel oils do not entitle any income-tax benefits as well,” says BPCL in its letter to the ministry.

During the visit of a high level delegation from petroleum ministry to Myanmar in April this year, BPCL was approached by Myanmar authorities to examine the proposal for product movement from India by road to Tamu in Myanmar.

Petroleum ministry officials said the Myanmar Petroleum Products Enterprise (MPPE) is keen to receive supplies of diesel and kerosene from BPCL’s Numaligarh refinery in Assam. The petroleum ministry had asked BPCL to revert with details of availability, price and payment terms to the Myanmar authorities.

In its letter, BPCL has mentioned that it has examined in detail the pricing of high speed diesel (HSD) exports to Myanmar from NRL by road. Based on the current price, the realisation from domestic sale of HSD is Rs 14,337.75 per metric tonne whereas the realisation from export to Myanmar works out to be Rs 11,934.28 per mt. Therefore, the net realisation is lower by around Rs 2,403.47 per mt.

Officials explained that this lower realisation is on account of various factors including the loss on north-east adjustment (NEA) collected by NE refineries on domestic sale consequent to availing the 50 per cent central excise concession of Rs 1,733.89 per mt.

Then there is a loss on account of terminal charges currently collected from oil marketing companies (of around Rs 97 per mt). In addition to this, there will be additional freight charges of Rs 816.77 per mt for transporting HSD from NRL by road to Tammu in Myanmar (being the differential between notional freight up to Siliguri and the road freight up to Tammu).