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Import of oil products not to be banned

Pradeep Puri

The government has turned down the demand for a ban on import of petroleum products. In the liberalised economic scenario and given the duty protection enjoyed by the Indian refining industry, it is not possible to ban the import of petroleum products, the government has said.

The demand for the ban was made by the chairman of the parliamentary standing committee on petroleum and chemicals, Mulayam Singh Yadav.

In a communication to petroleum minister Ram Naik, Yadav drew his attention to the 28th report of the standing committee, which had assessed the present refining capacity in the country at 116.07 million tonnes per annum (mtpa). This was expected to increase by 56.40 mtpa in the next five years, the report has said.

The committee had estimated the consumption of petroleum products during 2001-02 at 98.1 mtpa and the net exports at 3.6 mtpa. Moreover, the committee had noted that both Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited were in the process of establishing grassroots refineries at Bina, Allahabad and Bhatinda, where they had made huge investments in pre-project activities.

Yadav said when the refining capacity in the country was already exceeding the demand, what would be the situation if multinational companies, which might take over the public sector oil companies in future, preferred to import refined products.

To curb unnecessary imports, the committee had recommended that the government should ensure by legal means that marketing companies lifted stocks from indigenous refineries only and were not permitted to import refined products.

"I am sure, in order to conserve foreign exchange and to fully utilise the domestic refining capacity, the government will abide by the recommendations of the committee and will not allow imports of petroleum products in the country," Yadav had said.

But, the government has said that it was not possible for it to take such a decision in the liberalised economic situation.

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