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Pratim Ranjan Bose

Group to have refining capacity of 60 mt after commissioning the new project

A RELIANCE petrol pump in Navi Mumbai

Jamnagar , March 18

The 33-million-tonne Reliance Industries Ltd refinery here will focus on marketing through its 5,800 proposed retail outlets following commissioning of the Reliance Petroleum Ltd (RPL) refinery (also in Jamnagar).

RPL is scheduled to commission a 27-million-tonne refinery in 2008. Following commissioning of this project, the group will have a refining capacity of 60 million tonnes.

Group's strategy

As part of its strategy, the group is going to reduce its sales of petroleum products through oil PSUs. RIL is a major supplier of LPG and kerosene to oil PSUs. It may be mentioned that the company's supply contract with oil PSUs is due for renewal shortly.

Reliance currently exports roughly 45 per cent of the petroleum products produced by its existing refinery at Jamnagar. Bulk of exports constitutes diesel, gasoline and other high end products.

As RPL will be capable of handling heavier and sour crudes than the RIL refinery, and 75 per cent of its products will constitute petrol, diesel, ATF and alkalytes, the company is poised to generate wider refining margins.

Also, being located in an SEZ promoted by the group, RPL will enjoy sizeable fiscal benefits making it even more competitive in the global market.

According to sources, RIL is currently setting up three retail outlets a day. Already, 1,000 outlets have been set up, the target for the network being more than 2,000 this year. Unlike the oil PSUs, which follow a product exchange policy in regions where they do not have their own refineries, RIL markets its own products through its outlets across the country.

"Reliance is already a marginal supplier to oil PSUs and things are moving to a point where we will not have adequate supplies to lend them in the future," sources said.

More Stories on : Petroleum | Retailing | Reliance Industries Ltd

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