The oil industry's dues to the public sector Shipping Corporation of India (SCI) have risen to a whooping Rs 461.69 crore. The money is due from the Oil Coordination Committee (OCC), the representative body of the oil industry.
SCI has stated in its recently published annual report for 1999-2000, that most of the money is due for the transportation of crude. Apart from freight, money is also due to SCI as demurrage charges on crude tankers, reimbursement of dry dock expenses, and reimbursement of direct operating expenses.
SCI has been facing problems on the realisation of dues from the oil industry right since it entered into a transportation contract with Indian Oil Corporation in 1998-99. SCI also feels that disputes within the oil industry have compounded the payment problem.
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"It has been the company's experience that the intra-oil company financial transactions, arising out of transportation of crude, are far from being streamlined and not quite transparent. This in turn have led to the oil companies delaying and even refusing payments of demurrage, charter hire, direct operating expenses ," the annual report says.
The oil industry has been delaying payment to SCI for many years now. Various attempts by the government to solve this problem have not succeeded.
Apart from disputes arising out of the transportation of crude, SCI also had a dispute with the Oil & Natural Gas Corporation (ONGC) over payments to be made for the charter of 25 offshore supply vessels.
A high-level working group under the ministry of petroleum and natural gas went into the issue and gave its recommendations. ONGC has released Rs 63.68 crore so far and SCI is now pursuing the matter of further payments.
The Rs 2,000-crore SCI plays a dominant role in the Indian shipping industry and owns over 100 ships which account for about half the Indian fleet. It has a major presence in the dry bulk and tanker segments of the industry and is a fringe player in the container segment. Its presence in the container segment has however ensured stability in freight rates in the India--Europe trade.