New Delhi, June 17: The cut in central excise duties on LPG, petrol and diesel may have come as a major boon for the rest of the country but is proving to be a bane for the struggling Northeast refineries.

Petroleum ministry sources disclose that Bongaigaon Refineries and Petrochemicals Ltd (BRPL) will end up losing around Rs 40 crore while Numaligarh Refinery (NRL) will be poorer by Rs 30 crore during the current fiscal due to the reduction in excise duties.

As part of the concession package for the Northeast refineries, the government allows them to keep 50 per cent of the central excise duties that are collected on petroleum products. However, with the slashing of excise duties, they will now get 50 per cent of a smaller excise collection pool.

This erosion of revenue comes at a time when the railways are letting down the Northeast refineries by not providing them with adequate tank wagons to carry their products.

Sources said Bharat Petroleum chairman S. Behuria had met the railway board chairman recently to plead NRL’s case but did not meet with much success. The railways maintain that they do not have sufficient infrastructure to supply the 70-odd rakes (trains) that NRL needs every month and is making only 40-45 available.

This, however, has a cascading effect and the refinery has to be slowed down since the products are not being evacuated in time and the company is facing storage problems. Since the operations have slowed down, the refinery is not running at full capacity and, as a result, the profitability of the company is being affected.

While NRL has a capacity of 3 million tonnes, it is likely to process only around 2 million tonnes of crude at the current rate of production. While the government had diverted crude oil from the Ravva oilfields to augment supplies for the Assam refineries, the railways appear to have nullified the advantage.

NRL has run into further trouble as Indian Oil Corporation (IOC) has decided not to buy any petrol or diesel from the company. NRL could end up taking a Rs 40-crore hit as a result.

IOC was picking up as much as 40 per cent of the total petrol and diesel produced by NRL while the rest was marketed by parent company BPCL.

Sources said IOC has stopped purchasing diesel and petrol from NRL since April 1 this year although it is continuing to buy kerosene and LPG which is in short supply in the country.

The surplus petrol and diesel has now got to be sold through BPCL’s retail outlets which are situated in other states.