IOC to supply naptha

IOC to supply naptha

MUMBAI: State-owned Indian Oil Corporation (IOC) has come to the rescue of US multinational Enron's Dabhol Power Company (DPC) by offering it the much-needed naphtha at an import parity price of around $170 per tonne.

"The fuel would be routed through IOC via any public sector oil companies having presence in Maharashtra and Gujarat," he explained. Naik said, earlier he had discussed supply of Naphtha to DPC from IOC with National Congress Party and former Maharashtra chief minister Sharad Pawar and Dr Padmasinh Patil, present energy state minister over the issue.

"We have sufficient indigenious naphtha available so the Centre did not renew DPC's agreement with its international supplier Glencore," the minister said.

Over waiver of five per cent sales tax on naphtha by Maharashtra government, Naik said, he discussed the issue with chief minister Vilasrao Deshmukh today. "Deshmukh has accepted my suggestion for non-levy of tax on naphtha procured by DPC," he said adding final agreement would be signed in the next few days.

He said, certain issues like the quality and freight of the fuel are yet to be discussed. Meanwhile, on December 28, DPC in an informal communique to state government, had said that there was a possibility of scaling down its power tariff as naptha prices had crashed from $304 to $170 per tonne internationally, Patil said.

"This reduction in the naphtha prices will be passed on to DPC's tariff and hence the total charges can be lesser than percieved earlier," DPC sources had said. A high-powered committee, proposed to be set up by the state government to gauge the impact of DPC's Power Purchase Agreement (PPA) on the state, would also take into account the above mentioned fact, Patil said. DPC sources said they expect a supply of 80,000-90,000 metric tonnes naphtha for Dabhol plant, currently its average naphtha tankage size is 60,000 mt.