The Telegraph
Since 1st March, 1999
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Fewer wagons derail Numaligarh operations

New Delhi, Oct. 2: A shortage of railway tank wagons has been crippling the operations of Numaligarh Refinery Ltd. The refinery requires around 75 rakes a month to evacuate its products, but the railways could provide only 56 rakes in September.

This is leading to an accumulation of products in the refinery tanks which have a capacity of absorbing only eight days of production or “ullage” in technical parlance. Sources said around 85,000 tonnes of diesel have piled up in the storage tanks needing to be evacuated.

Bharat Petroleum Corporation Ltd (BPCL) chairman S. Behuria had met the railway top brass in Delhi, but the situation has not improved.

Riding on the back of BPCL's marketing network, Numaligarh is expected to make a profit of around Rs 12 crore in the first quarter of the current financial year. Senior petroleum ministry officials said the financial performance could improve further if the railways helped.

Since Numaligarh had been shut for a month for scheduled maintenance operations, the crude inventory had piled up. Now the refinery has to operate at a higher capacity to clear the backlog. However, this can be done only if the railways provide adequate wagons to clear the finished products.

The shortage of tank wagons has a cascading effect on the operations of the refinery. As the storage tanks start reaching peak capacity, the refining process has to slow down and ultimately stopped. The failure of adequate produce in the market hits the bottomline of the company.

Senior BPCL officials said while the refinery had a state-of-the-art loading facility, the railways were letting them down.

Unlike Indian Oil Corporation's (IOC) refineries in Assam, which can evacuate their products by pipeline as well, Numaligarh is totally dependent on the rail route for dispatching its products to markets outside the state. IOC also has a much bigger chain of retail outlets within Assam and a larger chunk of its products are consumed within the state.

Public sector oil companies have invested in 1200 railway tank wagons which have to be provided on a priority basis. The railways are also being increasingly guided by commercial considerations. As a result, they send these wagons to areas with quick turnaround time so that they can make more money. Sending these rakes to Assam takes more time.

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