With the export-oriented unit (EOU) status for its Jamnagar refinery ending next month, Reliance Industries Limited (RIL) is looking at re-opening its 1,450-odd fuel retail outlets to sell petrol and diesel in the domestic market, while lobbying for a free-market pricing regime.
RIL had in 2007 converted its 33-million tonne Jamnagar refinery into an only-for-exports unit (EoU) to get duty- free import of raw materials and exemption from payment of income tax.
Petroleum Ministry officials said that with the slowdown in the growth of petroleum products in the global markets, Reliance is now looking at the home market again.
However, as the government is yet to take a stand on aligning fuel prices in line with international crude oil prices, Reliance wants to keep its options open.
“Reliance is pushing for freeing fuel pricing from government controls. Although the export-oriented unit status for its Jamnagar refinery ends on March 31, 2009, the company has the option to extend it by another year,” said the official. This follows the finance minister’s budget-speech announcement that the EOU tax holiday will stay till March 31, 2010.
P Raghavendran, President, RIL's refinery business said, “You have to let it (international rates) pass on to the consumers.”
Although global prices have fallen, the political establishment is wary of taking any price de-control decision that might embarrass the rulers ahead of elections. A rebound in global crude prices would mean prices being raised before voting.