RIL to give Rs 750-cr discount to oil retailers

The import parity pricing in the petroleum refining sector seems to have been given a go-bye with oil companies agreeing to grant 40 per cent discount on import and export parity prices of petrol and diesel while selling from their refineries.

Reliance Industries Ltd (RIL), the private refiner with a 33 million tonne capacity, will give a Rs 750 crore-discount on LPG and kerosene to public sector retailers in 2005-06. It will also give a 40 per cent discount on petrol and diesel on quantities sold by it to PSU marketeers.

Indian Oil Corporation will have to grant discounts to Bharat Petroleum Corporation and Hindustan Petroleum Corporation. "IOC being a net seller of petroleum products will not benefit from the discounts much. The move will mainly benefit HPCL and BPCL," said a senior IOC executive.

RIL sells about 20 per cent of its products to PSU companies, including 2.8 million tonnes of LPG and kerosene.

RIL was, till last year, granting discounts to PSU oil companies, but now it will become a trade norm and all companies will be following it. The total discount on petrol and diesel will be Rs 1,200 crore.

While discounts on LPG and kerosene were worked out for the entire 2005-06, that on petrol and diesel will be for the seven months beginning September.

Standalone refineries, including RIL, were offering a total of Rs 1,500 crore discount on LPG and kerosene they sell to IOC, BPCL and HPCL, IOC Chairman Sarthak Behuria said today.

Besides RIL, other standalone refineries include Kochi Refineries Ltd, Mangalore Refinery and Petrochemicals Ltd and Bongaigaon Refineries and Petrochemicals Ltd.