RIL plea for Rs 2,570 cr export setoff turned down

The petroleum ministry has rejected Reliance Industries' request for reimbursement of Rs 2,570 crore on account of losses suffered in export of sensitive petroleum products.

In reply to a request by RIL this May, the petroleum ministry said that with the administered pricing mechanism being dismantled, there was "no mechanism for compensating export losses of any of the oil companies. In view of this, there can be no reimbursement of export loss claim, as requested by the company."

Sources said RIL would make a representation against the decision of the petroleum ministry. The company believed that its demand was based on facts, and wanted the government to compensate it for the losses.

RIL was granted marketing rights for transportation fuels in May 2002.

Giving its rationale for the decision, the petroleum ministry cited a 1999 letter which said that Reliance Petroleum and Essar Oil Ltd would themselves be responsible for disposal and sale, including exports with the assistance of IndianOil, of any surplus quantity of controlled products produced by them, and not required by Indian Oil, HPCL and BPCL for domestic sales.

It also said that any under-recovery or loss on account of exports would not be borne by the public sector oil marketing companies or from the Oil Pool Account.