Reliance, MRPL may have to produce more kerosene

The government is planning to send a missive to all oil refiners - Reliance and Mangalore Refineries and Petrochemicals (MRPL) in particular, to produce more kerosene to meet the demand of the public distribution system (PDS).

"An order may be issued in the next few days directing oil refining companies, including MRPL and Reliance, to produce 7% of their total refinery crude throughput as kerosene to maintain adequate supply of kerosene in the country," an official said.

India had to import kerosene in 2005 as domestic output was short of demand. Indian Oil Corporation (IOC) had accused Reliance and MRPL of not supplying enough fuel to meet the PDS requirement, and instead exporting jet kerosene and aviation turbine fuel (ATF).

Petroleum ministry first sought a ban on export of jet kerosene and ATF, but with commerce ministry not obliging, it sought the opinion of the law ministry for issuing specific instructions under Essential Commodties Act to the refiners.

As per legal opinion, the central government had the powers to issue directions on maintaining production levels in public interest, the official said.

The order would essentially mean that Reliance would have to produce 1,92,500 tonne of kerosene every month. The company had, in April-June, offered an average 1,00,000 tonne of kerosene per month to state-owned retailing firms for sale through PDS.

MRPL would have to produce 6,78,300 tonne  kerosene in 2005-06 as against its commitment to supply 5,29,000 tonne.