Friday, April 27, 2012

IOC to fix price on daily int'l price

Indian Oil Corporation (IOC) has agreed to the spot price mechanism which is expected to help fix price on the daily basis.
"IOC will fix petroleum price for Nepal Oil Corporation (NOC) on the basis of daily price of Platts/Argus — international petroleum organisation — and transportation cost to depots near the Nepal border,” said acting managing director of NOC Suresh Kumar Agrawal after the signing ceremony of the revised agreement on the supply of petroleum products between NOC and IOC here today.
The revised agreement will be in effect for the next five years till March 31, 2017. The earlier pact expired on March 31.
"IOC has also agreed to remove price adjustment tax applied in refinery margin and duty, which is almost two per cent,” he said, adding that the new provision will save around Rs 2 billion while importing petroleum products.
Likewise, IOC has also added Mumbai as a new petroleum import point for Nepal that would reduce petroleum cost transportation to mid-west and far-west region. Earlier, Haldia was the only import point.
The agreement has also stressed on maintaining quality of petroleum products. "There are sufficient provisions to control and regulate quality while importing and distributing petroleum products,” said Agrawal, adding that the construction of a pipeline from Raxaul to Amlekhgunj, and feasibility study of a pipeline for liquefied petroleum gas (LPG) also featured in the agreement.
The sole petroleum products supplier has granted one more import point for LPG — popularly known as cooking gas — including current refinery points Barauni, Haldia and Mathura. "Panipat has also been added,” he said.
However, the construction of a pipeline for petroleum products — petrol, diesel, kerosene and aviation fuel — was also in the earlier agreement signed five years back in 2007 but there has been no progress on the issue except for a detailed project study.
Similarly, the revised NOC-IOC petroleum supply agreement has also changed the payment system. According to the new agreement, NOC can pay the petroleum price to IOC a day later than the fixed date, if the prescribed day is a public holiday. "The agreement has included trade of bitumen, lubricants and grease between IOC and NOC," he said.
Likewise, IOC has promised to help build a competitive market price of petroleum products, said Agrawal, after signing the revised pact on behalf of NOC, whereas commercial general manager of IOC R Karandikar signed the pact on behalf of IOC.
Secretary of Ministry of Commerce and Supplies Lal Mani Joshi, high-level officials from NOC and IOC were also present at the agreement signing ceremony today.

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