BPCL's LPG loss at Rs 1300 cr

Bharat Petroleum Corporation Ltd (BPCL) has said it has incurred a loss of Rs 1,300 crore in 2003-04 on account of LPG despite government subsidy and it would be difficult to sustain such a huge loss for a long time.

"The subsidy of Rs 22 per cylinder was not adequate and the company had to incur loss of Rs 94 per cylinder which was very difficult to sustain for a long period", BPCL executive director (LPG) R K Singh said here.

BPCL, along with other PSUs, have already submitted a representation to the government seeking to increase the price of LPG though the government was yet to respond to it, he said.

Singh said that BPCL, along with GAIL was awarded the two city gas projects in Pune and Kanpur which would together require investments to the tune of Rs 800 crore.

Stating that feasibility study for the two projects was currently on, he said that two separate companies would be formed for the purpose with BPCL, GAIL and the concerned state government as equity partners in the line of Delhi, which already had city gas.

He said that gas would be supplied to Pune through the Uran pipeline, while there would be a tap-off point in the Hazira -Bijapur -Jagdishpur pipeline at Auriya to supply gas to Kanpur.

He said that at present, BPCL had an LPG market share of 25 per cent in the country and the company would require 2.5 million tonne of LPG in the current fiscal.

Singh said that of the company's total requirement of 2.5 mt of LPG in 2004-05, two million tonne would be made available from various indigenous sources including ONGC, GAIL, Reliance's Jamnagar refinery and the company's three refineries. The remaining 0.5 per cent would be imported.

He said BPCL was gearing up for competition in a de-controlled LPG market scenario when parallel marketers would also come in a big way.

At present, private players did not come up in a big way as they could not match the LPG price of oil PSUs which got government subsidy.

In the de-controlled scenario, the company would face competition both from the other oil PSUs and private companies as well, he said.

BPCL, he said, has taken a number of new initiatives to face future competition which included providing value-added services to its consumers.

As part of the initiatives, BPCL has introduced kitchenware of reputed make like Prestige, Hawkins and Nirlep to Bharat Gas consumers at a price much cheaper than the market price.

Singh said another area of focus would be rural market which had tremendous potential with about 60 crore people.

BPCL has already introduced mobile LPG filling vehicles in many rural areas.