NEW DELHI: Reliance Industries’ (RIL) plans to sell petrol and diesel from its export-oriented refinery at Jamnagar, Gujarat, in the local market through its 1,600-odd petrol pumps may face some trouble.
The government is not in favour of allowing the company to sell fuel in the domestic market from its export-oriented unit (EoU) without paying duties. RIL has sought tax exemptions and asked the government to relax the foreign exchange earning obligation so that it could sell fuel at its petrol pumps. The company had sought these exemptions, as selling fuel after paying taxes would not be profitable, said an analyst tracking the energy sector. “The export-oriented refinery is free to serve the domestic tariff area (DTA) by paying taxes and meeting the net foreign exchange earning (NFE) obligation. No special dispensation would be offered to any export-oriented refinery to supply products to private retail outlets in the local markets,” said a senior official, who did not wish to be identified. At present, products sold from an export-oriented refinery in DTA attract Rs 2 per litre additional excise duty on petrol and diesel, besides the education cess. Petrol also attracts a special additional excise duty of Rs 6 per litre. RIL, in a letter to the government, expressed its intention to re-open the petrol pumps. “It will be incongruous if Reliance imports high speed diesel (HSD) for retailing, while supplying to public sector undertakings (PSUs), because of NFE barrier and double duty,” it said. Put simply, RIL would be in a queer position if it were to import diesel or petrol and sell at its petrol pumps to avoid double duties. When contacted, an RIL spokesperson said: “We do not wish to comment.” The government has been considering a proposal to relax double duty and NFE obligation for EoU and special economic zone (SEZ) refineries so that they can supply petrol and diesel to petrol pumps of three PSUs, IndianOil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL). “Ministry of commerce and ministry of finance will take a final view. The proposal was conceived at a time when the diesel demand saw an unprecedented rise of 17-20%. But, the demand is normalising and well within the capacity of PSUs to meet it,” an official in the ministry of petroleum & natural gas (MoPNG) said. As per the proposal, products sold from export-oriented refineries would get deemed export benefits. In other words, the refiner would not only be exempted from paying additional taxes, but all sales in DTA would be counted against the company’s NFE liability. The proposal requires amendment of the Foreign Trade Policy (FTP). RIL’s existing export-oriented refinery in Jamnagar has a 33-million tonne per annum (MMTPA) capacity. The company exports its products to the US, European nations, Africa, Brazil, Argentina, Indonesia, Japan and many other countries. N.Sukumar Research Analyst www.kences1.blogspot.com --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
