Financial Daily from THE HINDU group of publications
Friday, Jun 09, 2006
Financial Daily from THE HINDU group of publications Friday, Jun 09, 2006 |
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Corporate
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Outlook Industry & Economy - Petroleum Bongaigaon, NRL to gain from excise sops Pratim Ranjan Bose
Kolkata , June 8 The 50-per-cent excise benefit for North Eastern States will come to the aid of Numaligarh Refinery Ltd (NRL) and Bongaigaon Refinery and Petrochemicals Ltd (BRPL) to offset the negative impact of additional discount on refining margins due to cut in customs duty and switch over to trade parity price. NRL is a subsidiary of BPCL and BRPL belongs to Indian Oil group of companies. Though NRL has forayed into retailing last year, both the companies are treated as standalone refineries with identical production capacities of roughly 2.3 million tonne each. According to sources, the cut in customs duty and 20 per cent discount on trade parity price would leave an additional impact of roughly Rs 15-16 crore on the balance sheet of both the companies in this fiscal. This is over and above the Rs 240 subsidy offered to marketing companies on per tonne of LPG and kerosene. The negative impact on gross refining margin (GRM) is, however, almost fully compensated by the rise in product prices resulting in rise in provisioning for sales tax. According to sources in IOC and NRL, retention of the 50 per cent benefit on sales tax on the enhanced prices would result in an additional accrual of Rs 15-16 crore per annum. "In the final analysis, there would not be any additional pressure on our GRM. Also the upgradation measures undertaken last year are expected to improve the operational efficiency resulting into boosting of the refining margin," an NRL official said. The company recorded a GRM of $3.5 per barrel net of discount, sales tax and freight in 2005-06.
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