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Richa Mishra

New Delhi , Aug. 8

THE bargaining power of the oil marketing companies (OMCs) will be put to test on Tuesday when the marketing heads of these companies are scheduled to meet to work out the best discount they can get from the private and standalone refiners on the petroleum products, particularly kerosene and LPG, bought by them for retail sale.

Tough negotiations have been going on between the state-owned OMCs and the private and standalone refiners such as Reliance Industries Ltd (RIL) and Mangalore Refinery and Petrochemicals Ltd (MRPL) for a discount on fuel purchase price in order to ease the subsidy burden of the OMCs. According to sources, a final decision is expected on the issue at the meeting of the marketing heads.

The refiners have offered a discount up to Rs 1,500 crore to all marketing companies, said Mr Sarthak Behuria, Chairman of IOC. While RIL has categorically refused to be a party to subsidy burden sharing, it has, however, assured that it was ready to consider offering the products on better commercial terms. As per reports, RIL is understood to have offered a discount worth Rs 750 crore and MRPL has offered a discount of about Rs 200 crore to Rs 250 crore on import parity price.

OMCs have been requesting for higher quantities of kerosene (SKO) for 2005-06 at a price that could offset their subsidy burden.

While RIL has agreed to maintain supplies during the current year at least at the same level supplied by it in 2004-05, the balance requirement for the year is to be met by supplies from Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation and MRPL.

RIL has agreed to supply 1.13 million tonnes of SKO and 2.6 million tonnes of LPG for this fiscal to IOC.

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