India: NRL Not to Increase Fuel Prices

“A decision has been taken to put on hold rise in prices and initiate some demand management measures,” the deputy general manager (marketing) of the company, A.K. Bhattacharya said.

Last week NRL authorities decided to hike oil prices at its retail outlets to contend with the international rise in crude prices and the non-payment of compensation by the Centre. Please see PetorlWorld news item from 14th May 2008.

Fearing huge losses, dealers were holding parleys with NRL asking them not to increase prices petrol and diesel.  Of the company’s 108 retail outlets across the country, 61 are in the Northeast where it has a 11 per cent stake. After successful commissioning of the refinery, the NRL started production from 2000.

With the Centre’s authorisation, the company ventured into retail marketing from 2004 and opened its first retail outlet in 2005. It has received permission from the government to set up a retail network of 510 outlets.

Bhattacharya said the company, however, had decided to put on hold initiatives to set up the new retail outlets. A source said this would be in force till the government takes a decision to compensate it for the losses it had incurred.

According to Bhattacharya, the company will initiate demand management measures like cutting down on supplies nominally to cut down on losses. There could be some changes in the working hours of the retail outlets, he said.

The company has tabled a demand before the petroleum ministry for a subsidy regime provided to the three public sector companies — Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL).

“We demanded that the NRL be treated on a par with the other oil marketing companies and its retail sales volume be considered as part of the BPCL group companies’ retail sales volume as the BPCL holds equity in NRL,” Bhattacharya said, adding there had been no response.