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ONGC to go it alone on naphtha exports

Archana Chaudhary

MUMBAI, Feb. 19

THE Oil and Natural Gas Corporation (ONGC) plans to export naphtha on its own in a bid to get better price realisation.

ONGC discovered ``there was a steep difference in price'' when it sold naphtha through Indian Oil Corporation Ltd (IOC) and Hindustan Petroleum Corporation Ltd (HPCL). ``We have been losing more than Rs 200 crore annually because of our dependence on the m,'' a senior ONGC official told Business Line.

The company is now exploring ways to export naphtha on its own to make good the huge losses. Its plan to set up a marketing group, anticipating the dismantling of the administered pricing mechanism in 2002, has seen minimal progress, according to company officials.

After the partial deregulation of petroleum products, ONGC has been forced to export naphtha through IOC and HPCL, since it is handicapped by the lack of a marketing set-up for naphtha, liquefied petroleum gas and kerosene.

The company produces 1.5 million tonnes of naphtha, 0.5 million tonne of LPG and 0.22 million tonne of kerosene every year at its Uran and Hazira units. Oil PSUs have to evacuate LPG and kerosene produced by ONGC as per the directives from the Oil Coordi nation Committee.

Naphtha being a deregulated commodity, ONGC's product has remained low on the priority list of PSUs trying to push their own stocks, leaving the company with no other choice but to export. The commissioning of IOC's Panipat and Reliance Petroleum's Jamna gar refineries has added to the country's naphtha and furnace oil glut.

``But we lack a proper marketing backbone, which forced us to channelise our exports through IOC and HPCL,'' the official said.

With the required experience and expertise under its belt, the company now plans to export naphtha on its own. `` Our officials are discussing the setting up of a marketing network,'' he said.

The company recently floated tenders for exporting two naphtha consignments of 25,000 tonnes each to be lifted by the end of February and March respectively. The company expects to get a price of $6,50,000 for the exports.

The naphtha consignment, to be despatched from Uran, near Mumbai, is understood to be for Thailand and Singapore.