The Hindu Business Line : Reliance LPG output cut may boost imports

New Delhi April 28 Reliance Industries Ltd's (RIL) plans to cut liquefied petroleum gas (LPG) production by 30 per cent from the middle of 2008 at its Jamnagar Refinery will result in higher imports.

In response to a question on whether the Government was aware that RIL has decided to cut LPG output to 1.6 million tonnes per annum (mtpa) from 2.6 mtpa at its Jamnagar refinery from April 1, 2008, and its likely impact on the supply of LPG in the country, the Minister of State for Petroleum and Natural Gas, Mr Dinsha Patel, said "RIL has informed that their existing refinery at Jamnagar has now become an export-oriented unit (EoU) and there is a plan to reduce LPG production to around 1.6 mt a year from mid-2008."

The reduction in production would result in increase in LPG imports during 2009-10 compared to the projected import during 2008-09, he said. The deficit between demand and indigenous production of LPG is met through regular imports being done by the public sector oil marketing companies, the Minister added.

EoU status exempts a company from paying local taxes and makes it eligible for zero duty on crude imports for the refinery. Reliance said the new rules would apply from April.

The 6,60,000-barrels-a-day Jamnagar refinery in Gujarat has an annual LPG production capacity of 2.3 mtpa. India consumes around 10 mt of LPG every year. In 2006-07, it produced 8.4 mt of LPG and imported 2.3 mt.

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