The Hindu Business Line : BPCL, HPCL seek nod to charter ships for oil imports

BPCL and HPCL have approached the Petroleum Ministry to allow them to charter ships for oil imports directly instead of going through Transchart, on the lines of similar dispensation given to IOC.

Senior officials told Business Line that the Ministry was examining the request of these companies.

Based on the experience of IOC chartering ships directly since June 2005, both BPCL and HPCL have applied to the Ministry since the flexibility of chartering their own vessels would bring benefits in terms of cost and time.

In April 2005, the Cabinet had granted permission to IOC to make shipping arrangements for importing crude on its own without going through Transchart; a final decision in case of BPCL and HPCL would also require Cabinet approval.

While giving its nod to the IOC proposal, the Cabinet had said that the arrangement would be reviewed after a year.

Indications are that the Petroleum Ministry is favourably considering the proposal.

IOC's experience shows that it has achieved a freight reduction of approximately Rs 60 crore in voyage fixture during June 2005-May 2006 compared to the corresponding previous period.

Further, a comparison of the fixtures, which loaded quantities less than minimum specified and those missed loading dates show that the performance on both these accounts has improved considerably with IOC's arrangement of chartering ships.

One of the conditions stipulated while giving permission to IOC was that it would follow all regulations relating to hiring of ships including those relating to Indian flag vessels and shipping on f.o.b. basis.

As per the policy, the first right of refusal is with Indian ship owners - if the offer of an Indian ship owner were technically suitable, the right of first refusal would be given to them.

As per reports, IOC almost doubled the percentage of Indian tonnage in 2005-06 compared to the previous year, while following all regulations.