Reliance Industries has secured nod from government to sell 1.5 lakh tonne LPG to private cooking gas marketers.
India is deficient in LPG and has to import part of the requirement, the LPG Control Order obligates that all cooking gas LPG produced locally must be supplied to state-run fuel retailing companies.
Private companies are not permitted to import and market LPG to bulk consumers under the Parallel Marketing Scheme (PMS).
As per an Oil ministry order, Reliance industry has been allowed to sell up to 10,000 tonne per month to parallel LPG marketers.
The permission, valid from 1 April to March 31, 2016 is subject to RIL in importing an equivalent quality and deliver to state-run Company.
The order ruled that, “RIL shall have to deliver and import the equivalent quantity to public sector oil marketing (OMC’s) at a price which makes OMC’s cost-neutral or cheaper trancaction by obtaining same quantity from local production by RIL.”
The arrangement would be valid till LPG import facility at Kandla Port, Gujarat is re-commissioned on 31 March, 2016 or till further orders, whichever is earlier.
There are 183 parallel LPG marketers in the country.
In February, last year government had asked RIL to stop supplying LPG produced in its Jamnagar, Patalganga and Hazira plants.The company has huge network of supplying cooking gas to one million customers. Mostly, in the rural areas and 134 auto LPG outlets.
Contesting the ministry view the company says, rules don’t obligates that all domestic LPG must be sold to state-run firms only.
As state oil marketing firms were not willing to pay market rates, RIL started selling domestic LPG in parallel market.
RIL’s subsidiary LPG Infrastructure India Ltd (LIIL) is doing parallel marketing of LPG.The company told the ministry that by prohibiting the company from marketing would deprive its rural customers in the country. Most of its customer are in the rural parts of Maharashtra, Rajasthan, Madhya Pradesh and Gujarat.
Based on this suggesting, the Ministry on August 5, 2014 allowed RIL to sell up to 10,000 tonnes per month of LPG to parallel marketers till March 31, 2015. Which now has been further extended till March next year.
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