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Thursday, Mar 28, 2002

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No `take-or-pay' deal with MRPL, says HPCL

Our Bureau

MUMBAI, March 27

HINDUSTAN Petroleum Corporation Ltd would not enter into any `take-or-pay' contract for marketing products of the Mangalore Refineries and Petrochemicals Ltd, according to Mr N.K. Puri, Director (Marketing), HPCL.

He said product offtake from MRPL would depend solely on HPCL's demand-supply position.

"We have been marketing MRPL products as per the guidelines of the Oil Coordination Committee, so far. Now that the OCC will no longer exist after complete decontrol of the oil sector after April 1, we would have one-to-one contracts with the company. And, this will depend solely on our demand,'' Mr Puri said.

The two companies have had differences over marketing of petroleum products with MRPL insisting on a `take-or-pay' agreement.

Hindustan Petroleum and the A.V. Birla group currently hold 37.5 per cent each in the 9-million tonne refining company.

The two partners have been at loggerheads over the loss-making venture.

The difference of opinion has resulted in the Birla group offering to increase its stake to 51 per cent by buying out HPCL at Rs 10 per share, amounting to Rs 200 crore.

The Birla offer was contingent on HPCL's providing MRPL assured marketing assurance.

MRPL, which expanded its capacity to 9 million tonnes from 3 million tonnes in April 2000, has been suffering consistent losses.

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