Bharat Petroleum Corporation Ltd (BPCL) is in talks with several power units in the country to sell off 80,000 tonne of naphtha worth over Rs 95 crore from its Numaligarh refinery in Assam.
The state-owned oil company is saddled with naphtha as there is no demand for it in the north-eastern region. So, the company is planning to transport the naphtha from Assam to Mumbai to prospective buyers in the western region.
A senior BPCL official said, "The accumulated naphtha stock is now fit only to be used as a feedstock for the fertiliser units and/or can be used for generating power."
"This is a distress sale. The refinery has accumulated five-month stock and we are considering ways of disposing it of. We are also negotiating with a top corporate houses for a one-time sale," the official added.
The company is also exploring alternative options of exporting the product through a dealer. However, the Numaligarh refinery will not get any benefit on the export of the product. "The refinery is on the pithead and no benefits will be enjoyed from exports of naphtha," the official said.
The Numaligarh refinery produces 20,000 tonne of naphtha which is transported to Haldia Petrochemicals and a few units in Kanpur and Mathura.
While other decontrolled products such as furnace oil, petroleum coke and sulphur are directly marketed by the refinery or through BPCL and other PSU marketing companies, the controlled products such as liquified petroleum gas, kerosene and diesel are marketed by PSU oil marketing companies.
The government has extended various incentive packages such as excise exemption benefit, freight subsidy scheme and reduction of interest rate by Oil Industry Development Board to make the refinery viable.
After fully meeting the demand in the north east region, around 77 per cent of the refinery's products are moved out of the region to West Bengal, Bihar, Jharkhand, Orissa, Uttar Pradesh and Madhya Pradesh.
The Numaligarh refinery is expected to process 2.5 million tonne of crude, which is equivalent to 83 per cent capacity utilisation.
