KATHMANDU, Nov 22: Essar Group, which operates the second largest petroleum refinery in India, has approached the government, expressing eagerness to export petroleum products to Nepal.
A delegation of top officials from Essar Oil visited Kathmandu this week and held talks with Minister for Commerce and Supplies Rajendra Mahato, requesting him to induct the company as an alternate exporter of fuel to Nepal.
The delegation also held talks with Nepal Oil Corporation (NOC) chief Digambhar Jha in this connection.
Sources said that the company was actually looking to work with the private sector. But since the government has not yet opened petroleum imports to the private sector, Essar has approached NOC for the business.
Currently, Nepal imports fuel from Indian Oil Corporation (IOC) alone and experts have long been pushing for the introduction of an alternate supplier to instill competition in petroleum imports. It is believed this will delight consumers in terms of pricing, quality and flow of supplies.
Talking to myrepublica.com, NOC chief Jha said that Essar´s proposal was good. “But we will need more details and time for taking any decision,” he added.
He further informed that Essar has committed itself to forwarding him specific business, technical and financial proposals, including prices, mode of delivery and technical specifications of the products, so that he could discuss these with higher authorities.
However, sources close to Jha said the corporation chief actually told the Essar team that NOC can instantly pledge Essar orders for as much as 50 percent of its total diesel imports.
Diesel makes up 60 percent of NOC´s total business. If NOC actually chooses to go with Essar, this will straightaway enable Essar to enjoy 30 percent of the total petroleum business in Nepal.
In this connection, the Essar team had expressed curiosity as to how IOC could react. But Jha referred them to a provision in bilateral agreement between NOC and IOC that allows sourcing of fuel from other suppliers as well.
Jha, however, has placed various terms and conditions for accepting Essar´s offer. First, Essar´s prices and products must be competitive; secondly, it should supply fuel to NOC from bordering areas (and not from Jamnagar, Gujarat where its refinery is based); and thirdly, the company should pledge a credit line as well.
Since NOC would prefer to avoid using IOC´s facilities for imports from Essar, the NOC chief sought that Essar; i) either lay down its own infrastructure along the bordering areas, or ii) make arrangements with Hindustan Petroleum or Bharat Petroleum, which have adequate facilities in Gorakhpur, so that NOC could uplift supplies from there, or else iii) make arrangements for delivering oil by railway up to the inland clearance depot (ICD) in Birgunj.
“We are excited with Essar´s move. But an actual decision on the matter will depend on how promising its proposal is,” said the source.
Essar Oil´s refinery in Jamnagar processes as much as 240,000 barrels a day at present. It supplies petroleum products to third countries as well. In Nepal also, it is already exporting furnace oil to the private sector.
PLEASE DESIST FROM ATTACKING THE WRITER PERSONALLY AND BE RESPECTFUL TO OTHER READERS.
Please give your full name while posting your comments. This is not to stifle the free flow of comments but your full name will enable us to print the comments in our newspaper.
![[del.icio.us]](http://images.del.icio.us/static/img/delicious.small.gif){kind=small}
