The State Trading Corporation (STC) of Mauritius has renewed an agreement to source petroleum products from Mangalore Refinery and Petrochemicals Ltd (MRPL), ending uncertainty.
STC Mauritius and MRPL have sorted out pending issues to their “mutual satisfaction”, said Megh Pillay, CEO of State Trading Corporation of Mauritius. These include the billing cycle, pricing formula and the premium at which MRPL will sell the products, as well as the size of the cargo.
As per the renewed contract, MRPL will sell 1.3 million tonnes of petroleum products annually for three more years to STC of Mauritius. The products include automotive gasoline and diesel, fuel oils, marine diesel and jet fuel (Jet A-1).
MRPL has been supplying petroleum products to Mauritius since 2006, on contracts that have been renewed three times. The new contract will run from August 1, 2013, to July 31, 2016, with fuel exports worth $1.1 billion each year to Mauritius. Petroleum products account for more than 80 per cent of India’s exports to Mauritius.
Pricing issue
Pillay told Business Line in a telephonic interaction that STC Mauritius and MRPL had agreed on the base quantities of each of the seven categories of products, as well as the pricing formula and cargo sizes.
He added that the price agreed for each category of products was based on the respective Platts Index plus a negotiated premium, taking into account the specifications of the buyer, as in similar international oil transactions.
“The products are for local consumption and power generation as well as for re-export as marine bunker fuels required by the growing maritime traffic crossing the South West Indian Ocean,” Pillay said.
Jet fuel is required by international airlines serving Mauritius, which is a major tourist destination, he said, adding that Mauritius also lay on a major sea route increasingly used as an alternative to the Suez Canal for East-West shipping. “The mutually beneficial arrangement will go a long way in further strengthening our close ties,” he added.
Refuelling hub
Mauritius is now looking at ways and means to take this co-operation to a new level. The Government of Mauritius has adopted a policy promoting the development of Port Louis as a major refuelling hub for the growing maritime traffic plying between the West and the East via the Cape of Good Hope, across the Indian Ocean.
“Major investments in petroleum storage and handling infrastructure are now envisaged. It is expected that Indian petroleum industry players, including MRPL, will participate in the development. We hope to soon receive M. Veerappa Moily, Minister for Petroleum & Natural Gas, in Port Louis, to pursue this interest,” Pillay said.