The Hindu Business Line : Numaligarh Refinery sees better refining margins

Kolkata. April 2 Numaligarh Refinery Ltd (NRL) is expecting an improvement in its refining margin beginning second quarter of 2008-09, following commissioning of Numaligarh (Assam) – Siliguri (West Bengal) product pipeline.

The cross-country pipeline - promoted by Oil India Ltd (OIL) - will help faster and more cost efficient evacuation of 75 per cent of NRL’s refined products leading to increase in refining margin by a minimum of $ 0.5 a barrel.

Once the pipeline is in place, bulk of the cargo will go by pipeline and the rest by road. Railway’s share will come down to negligible levels.

NRL is a 3-million-tonne refinery set up under the Assam accord (1985). While BPCL holds controlling stake (61.65 per cent) in the company, OIL (26 per cent) and Assam government (12.35 per cent) are co-promoters of the project.

According to sources, commissioning of the pipeline – which is already running seven to eight months behind the schedule - is now expected to be complete latest by June.

Retail front

Meanwhile, NRL bottom line may take a hit of about Rs 100 crore in 2007-08 due to mounting losses on petroleum product retailing.

NRL entered into retailing in 2005-06 with the aim of opening 125 outlets across the in two years. The company currently has 79 retail outlets. While the bulk of the outlets are located in the North eastern States of Assam, Meghalaya, Nagaland and Manipur, a good number of bunks are located in West Bengal, Bihar, Orisa, Uttar Prades, Punjab, Andhra Pradesh, Rajasthan, Haryana and Delhi.

Sources told Business Line that the company was currently losing up to Rs 7 a litre on sale of petrol and Rs. 12 a litre on diesel.

When contacted, Mr. N Bhakta, Director Finance, did not confirm the news. “I cannot comment on the same,” he said.

NRL posted a profit of Rs. 583 crore on a turnover of Rs. 7920 crore in 2006-07.

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