Govt allows RIL to sell LPG to private marketers

New Delhi, August 31

The government has permitted Reliance Industries (RIL) to sell up to 1.2 lakh tonne of LPG produced at its plants to private cooking gas marketers.

The LPG Control Order mandates that all cooking gas (LPG) produced locally must be supplied to state-run fuel retailing companies as India is deficient in LPG and has to import a part of the requirement.

However, under the Parallel Marketing Scheme (PMS), private companies are allowed to import and market LPG to bulk consumers.

RIL has been permitted to sell up to 10,000 tonne per month to parallel LPG marketers, according to an Oil Ministry order.

The approval, valid from April 1 to March 31, 2016, is, however, subject to RIL importing an equivalent quality and delivering to state-owned firm.

“... RIL shall have to import the equivalent quantity and deliver it to public sector oil marketing companies (OMCs) at a price which makes this transaction cost-neutral or cheaper to OMCs vis-a-vis procurement of same quantity from domestic production by RIL,” the order said.

This arrangement would be valid till LPG import facility at Kandla Port in Gujarat is re-commissioned or March 31, 2016 or till further orders, whichever is earlier. There are a total of 183 parallel LPG marketers in the country.

The government had in February last year asked RIL to stop retailing LPG produced in its Jamnagar, Hazira and Patalganga plants. The company has a vast network that supplies cooking gas to 1 million customers, mostly in rural areas, and 134 auto LPG outlets.

RIL, the largest single location LPG producer in the country, had contested the ministry view saying rules do not mandate that all domestic LPG must be sold only to state firms.

Also, it was selling domestic LPG in parallel market because state oil marketing firms were not willing to pay market rates. — PTI