Reliance Industries Ltd, which is yet to set up a retail network to sell its Jamnagar refinery output, on Friday earned a breather when public sector oil firms revised their requirement of diesel from it to 3.7 million tonnes in 2004-05 from the previously indicated 1.3 million tonnes.
But the 3.7 million tonnes diesel, oil companies plan to buy from Reliance Industries in 2004-05 will be less than 6.2 million tonnes of current year which the private sector firm wanted Indian Oil, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd to continue buying after the expiry of current contract on March 31, 2004.
Besides, Reliance Industries Ltd will also have to sell petroleum product at a discount so as to make the backing down in public sector refinery output commercial attractive, senior government officials said.
According to a deal brokered at a meeting convened by Petroleum Minister Ram Naik, state-owned oil retailers will buy 6.5 million tonnes of petroleum products from Reliance for another year to give time to the country's sole private sector refiner to set up its first phase of 1,500 petrol pumps.
The state firms had planned to cut purchase of petrol, diesel, kerosene and LPG from RIL to 4.3 million tonnes from current year volumes of 12 million tonnes owing to expansion of Mumbai refinery of BPCL and Chennai refinery of IOC and recognition of Mangalore refinery's full capacity.
"The 4.3 million tonnes requirement had not factored in the shutdowns the refineries are due to take for maintenance next year and so the volumes will go up," Petroleum Secretary B K Chaturvedi said.