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‘Essar selling petrol to Reliance’
Interesting alliances are being seen in the petroleum sector. The most recent is Essar Oil Ltd (EOL) selling petrol (motor spirit) from its Vadinar Refinery in Gujarat to Reliance Industries Ltd (RIL). Essar Oil has till date sold close to 5,000 tonnes of petrol to Reliance.
Interesting alliances are being seen in the petroleum sector. The most recent is Essar Oil Ltd (EOL) selling petrol (motor spirit) from its Vadinar Refinery in Gujarat to Reliance Industries Ltd (RIL). Essar Oil has till date sold close to 5,000 tonnes of petrol to Reliance.
Sources told Business Line that Essar is selling petrol to Reliance at three different locations. Essar started selling the petroleum product to Reliance from Jamnagar in May, followed by Rajasthan in June and subsequently from JN P ort from July end. It is also selling a small quantity to Shell.
Pricing
The product is being sold to Reliance at refinery transfer price (RTP) or trade parity price as it is called now, sources said. Declining to give the exact pricing, the source indicated that RTP rates change every 15 days and that it is Rs 2 per litre higher than the retail selling price (RSP) of the product.
For instance, if the RSP is Rs 20.50 per litre, the price at which Essar will sell to Reliance will be Rs 22.50 per litre. "The retail selling price is lower than the price at which Essar or Reliance is buying the product," sources explained.
This anomaly in pricing has had an adverse impact on the retail business of private sector players, as they are not extended any subsidies like the PSU marketing companies for selling petroleum products below the cost price, he added.
Essar has not got into product swapping arrangement with others and is directly buying or selling, sources added. Essar is also exporting its products to Europe and other countries.
Sources told Business Line that Essar is selling petrol to Reliance at three different locations. Essar started selling the petroleum product to Reliance from Jamnagar in May, followed by Rajasthan in June and subsequently from JN P ort from July end. It is also selling a small quantity to Shell.
