The Telegraph
Since 1st March, 1999
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BPCL cooks gas import plan

New Delhi, Nov. 2: Bharat Petroleum Corporation Ltd (BPCL) has decided to break free of its dependence on Indian Oil Corporation for the import of LPG and will now start purchasing the gas on its own from the international market.

Until now BPCL had been importing its LPG through IOC and paying a commission for it. The decision has been taken following BPCL's success in importing its own crude oil for the first time during the current fiscal after terminating the arrangement for crude imports with IOC.

BPCL will also make its own shipping arrangements as well and has tied up for tankage facilities at various ports on both the western and eastern coast. Sources disclose that the company has tied up with Petronas-IOC joint venture for use of its tankage at Haldia and with Hindustan Petroleum Corporation for storage facilities as Vizag.

BPCL has managed to save around Rs 100 per tonne on its crude imports after shedding its dependence on Indian Oil Corporation (IOC). Freight costs declined since BPCL was bringing crude in bigger ships directly to Mumbai and this was also helping it to schedule its crude processing plans and crude imports in a better manner to bring down inventory costs.

Demurrage cost of ships due to erratic scheduling earlier had also come down drastically. The company is also saving on the 0.25 per cent commission that was being paid to IOC for canalising the imports.

The company has largely applied the same logic to take the plunge for its LPG imports as well. BPCL international business division is now reported to have gained adequate experience to handle the job.

BPCL's LPG business is reported to have grown at a rate of 13.5 per cent during 2002-03 compared to the industry average of 11.7 per cent. The company now commands a 25 per cent market share in the LPG segment. However, IOC still rules the roost. Taking charge of its own imports is expected to help BPCL further streamline its marketing operations.

BPCL had commissioned 105 new LPG distributorships nation-wide during the year ended March 31, 2003. It plans to set up new LPG bottling plants at Hazira, Pune, Vijayawada and Bangalore to cater to this fast growing business segment.

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