Reliance Industries (RIL), the country’s largest private company, may reopen its domestic petroleum retail outlets, as the export-oriented unit status of its first refinery at Jamnagar in Gujarat has been ended.
The company, which was talking to public sector oil marketing companies for a retail joint venture, will now have the flexibility to sell fuel in both domestic and foreign markets, though benefits like duty-free import of raw materials will end now.
The Jamnagar refinery, which has a capacity 660,000 barrels a day, was granted the export-oriented status in April 2007. The status would have gone on till next year. To re-enter the Indian market in a big way, the company asked the government to end the status. The request was granted some days ago, said a company official on condition of anonymity.
“As the new refinery of Reliance Petroleum (RPL), a subsidiary of RIL, is focused on the overseas market, the old refinery of RIL can sell a major chunk of its products in the local market. Though we cannot claim most of the tax benefits, the freedom of choosing markets and selling products will be higher,” added the official.
An RIL spokesperson declined to comment.
The Jamnagar refinery was commissioned in July 1999 and fully utilised the seven-year tax holiday. It enjoyed a two year export-oriented unit status from April 16, 2007, which earned it incentives like duty-free import of raw material. The status was granted on the condition that it export at least 70 per cent of the finished products. RIL is the only company in the country which converted its refinery into an export-oriented unit.
The newly commissioned refinery of RPL, which has a capacity of 580,000 barrels a day, is housed in a special economic zone (SEZ). So, it gets the benefit of duty-free imports in return for exporting all finished products.
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