Essar Oil To Sell Low-priced Imported Diesel In Bulk To Maharashtra, Gujarat

Mumbai, May 22: | Updated: May 23 2003, 05:30am hrs
Essar Oil Ltd (EOL) has decided to sell imported diesel to bulk consumers. The company will target bulk consumers till the infrastructure for retailing petroleum products is in place. This is the first instance of a private oil company importing diesel.

The company is presently unloading 15,800 tonne of diesel which was imported from the Middle-East. EOL chief executive Raj Verma said that the company was targeting bulk industrial consumers. The diesel would be sold to customers in Maharashtra and Gujarat. The company added that it would sell diesel depending on the demand from consumers.

A senior EOL official said that the diesel would be sold at a price lower than the prevailing market rate, but refused to divulge the rate.

He added that import parity price was lower than the existing price of diesel sold by domestic players.

An analyst added that EOLs decision has irked public sector oil companies who sell diesel at higher prices. The government, through an announcement in the Exim Policy in April this year, had decided to allow private petroleum companies to import petroleum products directly. In April last year, though oil companies were permitted to import crude on their own, diesel had to be channelised through Indian Oil Corporation (IOC).

The government, recently, granted licence to private players Reliance Group, EOL, exploration major Oil and Natural Gas Corporation (ONGC) and Numaligarh Refineries Ltd (NRL) to market transportation fuel on their own.

Meanwhile, EOL is preparing for setting up retail outlets and expects to take off in November this year. The company had written to the government seeking permission to set up 1,700 retail outlets for selling petroleum products across the country.

The company is also looking at medium- and long-term supply arrangements with local public sector oil companies to source products for its petrol pumps till its refinery is commissioned.

The company is setting up a 10.5 million metric tonne refinery at Vadinar in Gujarat.