OIL to earn Rs 40 crore as carrier fees from IOC

State-owned Oil India Ltd (OIL) will be richer by Rs 40 crore that it will receive from Indian Oil Corporation (IOC) as 50 per cent of the transportation charges for the crude supplied to the latter's three refineries, Assam Oil Division, Guwahati and BRPL, in the north-east during 2002-04.

OIL's long-standing demand for pipeline transportation charges was partially met at a meeting chaired by additional secretary M S Srinivasan on April 12.

The meeting decided in favour of awarding the charges though the crude oil supply agreement (COSA) between OIL and user refineries in the north-east envisaged that the transportation charges were payable by the refineries only if crude prices dip below $20 a barrel.

However, the meeting was of the view that unlike the other state-run exploration and production company, Oil and Natural Gas Corporation (ONGC), OIL is operating only in the north-east and pipeline transportation is one of its main businesses.

Therefore, the meeting decided that IOC could be asked to pay it 50 per cent of the transportation cost for the crude supplied to its N-E refineries in 2002-04 irrespective of the crude cost.

It was also decided that that while ONGC also had entered into a similar COSA with IOC, it will not be entitled to any transportation cost. This is so since unlike OIL, ONGC has many more businesses and it supplies large quantities of crude outside north-east.

Moreover, the meeting was of the view that Numaligarh Refinery being a refinery in the north-east without any venture outside the region, will be exempt from the payment of transportation charges to OIL for this period.