Reliance says output intact, no LPG shortage

A day after a major fire engulfed a desulphurisation unit at Reliance Industries' Jamnagar refinery, the company said operations were back to normal and the incident would have "no impact, whatsoever, on the financial performance of the refinery, or for that matter, on the final products."

Dismissing reports of domestic shortage of liquefied petroleum gas due to the fire, the company, in a statement, said "LPG production... continues to be normal at an average production rate of over 7,000 tonnes per day."

Jamnagar refinery, the third-largest in the world with a capacity to process 660,000 barrels per day or 33 million tonnes per year, meets about one-fifth of the country's liquefied petroleum gas demand.

"All sales and other commitments of the refinery are being adhered to without any interruption," the company added.

At a media briefing in Jamnagar, Parimal Nathwani, Reliance Industries' group president (corporate affairs), Gujarat, said, "Reliance has supplied 6,000 tonnes of liquefied petroleum gas via GAIL's pipeline and 600 tonnes of liquefied petroleum gas by road to Indian Oil Corporation (Indane) and Hindustan Petroleum (HP) even in yesterday's crucial hours."

Not surprisingly, government-owned oil companies have decided to defer a decision on additional liquefied petroleum gas imports for a few days.

"I do not think additional imports will be required," Indian Oil Chairman Sarthak Behuria told Business Standard.

The company, which accounts for over half the liquefied petroleum gas distribution outlets in the country, has 8-9 days of stock of about 270,000 tonnes.

Petroleum Minister Murli Deora also said there would be no shortage of liquefied petroleum gas as the fire-hit refinery was working at "near-normal" capacity, and the government-owned companies had enough stocks to tide over any temporary blips.

Meanwhile, a committee of four experts, three in-house members and one from Shell, has been set up to look into the cause of the fire, which claimed one life and seriously injured one person. No time-frame was given to the committee to submit its report.

Insurance surveyors are expected to visit the site tomorrow. The total sum insured of the policy issued to Reliance Industries is Rs 49,000 crore, of which the sum insured for the property cover is Rs 29,000 crore while for loss of profit it is Rs 20,000 crore. However, the loss of profit cover does not kick in until November 1.

Though the BSE Sensex was up 75.13 points on Thursday, Reliance Industries, which carries the highest weight in the Sensex (11.33 per cent) closed 1.59 per cent down at Rs 1,175.20 on the Bombay Stock Exchange, sliding back to number two on the market capitalisation chart, after ONGC.

The market capitalisation of Reliance Industries was down to Rs 163,000 crore while it was Rs 164,000 crore for ONGC.

Trading volumes of Reliance Industries were relatively thin on both the bourses with the stock registering less than its two-week average volume. The traded volume was Rs 7,554. 87 crore on the BSE and Rs 286. 37 crore on the National Stock Exchange.

Analysts pointed out that the Reliance share price movement today was in keeping with the street's expectations. They expect the stock to recover in the next few trading sessions.