Calcutta, Sept. 20: Indian Oil Corporation (IOC) hopes to clock export revenues of around Rs 4,000 crore this fiscal against an earnings of Rs 1,500 crore last year. This is the first time that the Fortune-500 company is eyeing a major jump in its exports earnings. Company sources said the focus on exports has been strengthened because of the drop in domestic demand.
“We plan to export around 3 million tonnes of surplus petroleum products by the end of March 2004,” they said.
The state-owned refiner, which is the largest producer of petroleum products, has already initiated discussions with several oil trading companies in Sri Lanka, Bangladesh, Nepal and Bhutan.
IOC will jack up export of petroleum products to Sri Lanka to 1.5 million tonnes in 2003-04 and also enter Maldives, Bangladesh and Mauritius.
Last year, the company signed a one-year contract for exporting 30,000 tonnes of diesel and 10,000 tonnes of aviation turbine fuel (ATF) every month to Sri Lanka.
The company also struck a deal with Mangalore Refinery and Petrochemicals Ltd (MRPL) to export additional 2,40,000 tonnes of diesel and ATF to Sri Lanka in the first half of the current fiscal.
IOC will export five lakh tonnes of diesel to Bangladesh and is in talks with the Bangladesh Petroleum Corporation to sign a long-term contract for supply of diesel and other petro products, sources said.
“Our advantage is that we have refineries close to Bangladesh and hence the transportation cost is cheaper than any other country,” they added.
IOC has also decided to increase the product supply to Nepal to 1 million tonnes in 2003-04 from 7 lakh tonnes last year.
A senior IOC executive said the company is focusing on exports as it feels a glut in domestic market would pull down the growth rate for all Indian oil companies at least in the short and medium term.
“Moreover, in a free market situation, one has to be prepared for all kinds of business competitions, including a price war. Hence, exposure into newer markets is a welcome move,” he said.
In July 2002, IOC signed a term contract with Sri Lanka’s Ceylon Petroleum Corporation for supply of 480,000 tonnes of petroleum products for one year. The company has also incorporated its wholly-owned subsidiary, Lanka IOC Pvt Ltd in Sri Lanka for product retailing. The Sri Lankan government has already permitted the IOC subsidiary to retail petrol and diesel. Lanka IOC has since then taken over the 1 million-tonne oil tank at Trincomalee on a 35-year lease and has started retailing petroleum products.