IOC objects to Kolkata port's dock fee on oil

Petroleum ministry asked to persuade port to drop its claims.

Indian Oil Corporation has objected to Kolkata port's move to charge wharfage (for berthing) on petroleum products transported via the pipeline that runs along the Hooghly river bed and connects Haldia to the Kolkata dock system.

Indian Oil has requested the petroleum ministry to take up the issue and persuade Kolkata port to drop its claims.

"The company will not pay wharfage on the products being carried through the pipeline as no resources or facilities of the port are being used for transporting liquid cargo," IOC told the petroleum ministry.

The shipping department had written to the petroleum ministry, raising the issue of IOC not paying its statutory dues to the Kolkata port. In its reply, the company said it was ready to pay land rent and right-of-way charges, but not the wharfage which varied with the amount of cargo being carried through the pipeline.

IOC argued that meeting the demand of per tonne rent for just laying a pipeline through the port trust land will set a wrong precedent. This is because similar demands may arise across all ports and even the railways may ask for compensation on the basis of throughput instead of levying an annual fee. "Such charges will put undue pressure on consumers," IOC said.

It also pointed out that according to legal opinion sought by it, the port did not have the jurisdiction under the Major Port Trust Act 1963 to levy wharfage on services it had not rendered and for providing the right of way.

Indian Oil was given permission to lay a product pipeline below the Hooghly river bed last year subject to fulfillment of certain conditions, including land rent.

Subsequently, another meeting was held where recovery of wharfage was discussed, but Indian Oil had not agreed to pay per tonne rent.