RPL, Essar, MRPL seek marketing rights for controlled petro products

New Delhi, May 7: RELIANCE Petroleum Ltd (RPL), Essar Oil Ltd (EOL) and the Aditya Birla group-promoted Mangalore Refineries and Petrochemicals Ltd (MRPL) have sought marketing rights for controlled petroleum products before deregulation of the sector in April, 2002.

The companies, in a recent presentation to the Ministry of Petroleum and Natural Gas, pitched for the granting of marketing rights immediately “so that when the transition period is over and full deregulation sets in, they would be well prepared for it as development of required infrastructure would take time,” highly placed official sources said.

While RPL has made a case for setting up retail outlets in excess of 1,500, Essar has said that it had identified 1,700 locations all over the country for setting up retail outlets. On its part, MRPL said that it had identified 1,800 locations.

The three companies pleaded that they satisfied the relevant norms—of investing or proposing to invest Rs 2,000 crore in activities of exploration and production, refining, pipelines or terminals, and thus may be authorised to market transportation fuels, they said.

RPL operates the world’s largest grassroot refinery of 27 million tonne at Jamnagar in Gujarat while Essar is constructing a 10.5 million tonne refinery at Vadinar, with an investment outlay of about Rs 8,000 crore.
MRPL has set up a nine million tonne refinery at Mangalore in a joint venture with Hindustan Petroleum Corporation Ltd (HPCL).

Reliance, in its presentation, said that refining was only a means to achieve the end goal—marketing. “Refinery margins were generally only 1/8th of marketing margins,” it argued.

RPL stated that if it they did not get marketing rights they would not be on an equal footing with other market players for negotiating the marketing of their products, sources said.

As per the present policy, refineries in the private and joint sector are not permitted to market controlled products including petrol, diesel, LPG (cooking gas for domestic use) and kerosene for the public distribution system (PDS).

MRPL stressed on the need for being given marketing rights straight away as the company has been incurring losses since the start of deregulation and needs to establish market presence before complete deregulation.

Seeking permission to set up retail outlets immediately, EOL said that it would be setting up the retail outlets with their own funds and, therefore, proposed to be treated at par with similar dealers of oil companies who put up retail outlets with their own funds. (PTI)