Financial Daily from THE HINDU group of publications
Saturday, Dec 31, 2005
Financial Daily from THE HINDU group of publications Saturday, Dec 31, 2005 |
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Industry & Economy
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Petroleum IOC-IBP combine seeks location-wise freight subsidy from Government Pratim Ranjan Bose
Kolkata , Dec. 30 THE IOC-IBP combine has appealed to the Ministry Of Petroleum and Natural Gas for payment of location-wise freight subsidy for supply of petrol and diesel in remote and far-flung areas. This is in line with the freight subsidy currently provided by the Centre for supplying LPG and kerosene to remote areas. The IOC group incurs loss of over Rs 300 crore a year for supplying motor spirit (MS) and high-speed diesel (HSD) in such areas. Though having less exposure to such areas, other oil marketing companies have also rallied behind IOC for differential freight subsidy. According to a company spokesperson, IOC is the only supplier of MS and HSD in the Andaman and Nicobar Islands, Lakshadweep, Ladakh, and several other remote parts of Jammu and Kashmir, extreme ends of Himachal Pradesh, and remote areas of North-Eastern States. This apart, according to company sources, IOC (read outlets) is present in much larger numbers than the combined strength of all its competitors in the interiors of the country and other remote and hilly areas. "In addition to the exorbitantly high handling and storage charges shelled out for maintaining supply of fuel in these areas, we are seriously affected by high freight cost," a senior IOC Official told Business Line. "The existing policy does not take care of this high freight cost leading to nearly Rs 300 crore of under-recovery annually. With freight cost on an upswing, the under-recoveries are bound to increase at a faster pace in the foreseeable future."
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