New Delhi, May 29: Indian Oil Corporation has saved close to Rs 150 crore on its shipping costs after severing links with Shipping Corporation of India (SCI) during the financial year ended March 31, 2003.
The earlier arrangement, under which SCI was the nodal shipping agency for bringing in crude imports of the public sector oil companies, came to an end on April 1, 2002. The freedom to go to the open market for hiring ships was part of the liberal reforms introduced to make the national oil companies more competitive as the petroleum sector was thrown open to private companies.
Sources disclose that IOC hired very large crude carriers (VLCCs) to import crude oil. These large ships enjoy economies of scale as a result of which the freight rate is much lower than smaller ships categorised as Aframax or Suezmax tankers. A VLCC can carry up to 2.5 lakh tonnes of crude while a Suezmax can hold about 1.3 lakh tonnes. Aframax is the smallest category with a carrying capacity of 90,000 tonnes.
According to current rates, the freight of a VLCC works out to $ 3 per tonne of crude while that of a Suezmax tanker is $ 5.5 per tonne. Aframax rates are the highest at $ 6 per tonne which is twice as high as a VLCC.