The Hindu : Tamil Nadu / Chennai News : PSUs also agree to supply diesel at concessional rates

Online edition of India's National Newspaper
Friday, Apr 22, 2005

Tamil Nadu

Tamil Nadu - Chennai

PSUs also agree to supply diesel at concessional rates

T. Ramakrishnan

CHENNAI: : Oil public sector companies have also agreed to supply high speed diesel oil to the State transport undertakings in Tamil Nadu at the concessional rate offered by Reliance Petroleum Marketing Private Limited.

According to the agreement, the STUs will get a discount of Rs. 1,300 per 1,000 litres (kl), the rate given by Reliance.

"We recently signed the pact. The agreement is in force from April 1 and will be valid for six months," says a senior government official. The deal for the purchase of the fuel is renewed every six months.

About two months ago, the STUs entered into a deal with Reliance, which agreed to offer a discount of Rs. 1,300 a kl.

This prompted the public sector companies to take a relook at their terms of business with the STUs and "eventually, they too have fallen in line," the official says. Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation supply diesel for 278 STU depots, while Reliance provides the fuel for 20 depots.

The daily requirement is 1,490 kl, of which 1,376 kl comes from the public sector companies and 114 kl from Reliance.

Asked how the bills would be adjusted in case of a price hike, the official said the discount rate of Rs. 1,300 was fixed.

The rate per litre at which the STUs buy diesel is Rs. 28.84 after taking into account the discount. Since October 2003, the national companies had been extending a discount of Rs. 700 a kl to the STUs. Late last year, when the State Government came to know that the companies agreed to offer a higher discount to the Andhra Pradesh transport corporations, it took up the issue with them, leading to the recent agreement.

"We will be able to save Rs. 75 crores in a full year," says the government official.

As for the arrangement with Reliance, the supply of HSD oil has begun at two depots in Chennai.

The official said the remaining 18 depots, earmarked for the company, were in the interior parts of the State.

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