| Numaligarh refinery |
Guwahati, Sept. 6: Numaligarh Refinery Ltd will report less profit this year because of losses suffered after restructuring of duties.
The financial results for 2011-12 will be declared here tomorrow at its 19th annual general meeting. A source said the restructuring of duties by the Centre had robbed the company of around Rs 640 crore which had made a big dent into the revenues of the company which is being reflected in this year’s accounts.
“The profits after tax are expected to be less than Rs 200 crore,” the source said. NRL’s profit after tax was Rs 279 crore during the 2010-11 fiscal. The ministry of petroleum and natural gas which had carried out duty restructuring last June in the wake of high crude prices and mounting under recoveries of oil marketing companies had led to reduction in customs duty on crude oil from five per cent to nil, motor spirit/high speed diesel from 7.5 per cent to 2.5 per cent and excise duties on high speed diesel (HSD) from Rs 4.60 a litre to Rs 2.
The source said the reduction of customs duty on crude oil does not bring any benefit to Northeast refineries as these are processing indigenous crude oils. In fact, after the change, Northeast refineries are at a disadvantageous position vis-à-vis refineries processing imported crude oil as refineries in the Northeast are required to pay VAT at 5 per cent and entry tax at 2 per cent.
“Had there been no duty restructuring the profits would have risen substantially,” the source said, adding that the other parameters of refinery have performed excellently.
In fact, the refinery has already handed over its retail outlets to its parent company, Bharat Petroleum Corporation Ltd, as it was not possible to continue in the retail sector with such high under-recoveries (Rs 183 crore in 2011-12). The expansion plans of the refinery will be revealed in the annual general meeting and the reasons for reduction in profits is expected to be put forward in the meeting tomorrow.
The refinery is increasing its production capacity from three to 80,00,000 tonnes a year to make itself viable and which would cost between Rs 8,000 crore and Rs 10,000 crore and will be completed by the end of 2017 — the end of the Twelfth Plan period.
Assam chief minister Tarun Gogoi had moved the Centre on the woes being faced by the refinery.