Petroleum ministry has asked Mangalore Refinery and Petrochemicals Ltd to put on hold the setting up of new retail outlets for two years due to under recoveries in retail marketing of petrol and diesel, the company has informed its shareholders.
The company also said it has reduced supplies of direct sale of diesel to the railways, state road corporations and other large consumers from April 2008 to restrict heavy under recoveries on these sales.
In the annual report sent to the shareholders , the company said it has approval to set up 500 retail outlets across the country. The company had opened its first retail outlet in Karnataka early this year.
''The ministry for petroleum and natural gas has recently directed the company to put on hold setting up of new retail outlets for a period of two years '', the company said.
MRPL, a subsidiary of ONGC with turnover of over Rs 37,000 crore (Rs 370 billion), has been representing to the ministry for compensation for the under recoveries sustained in direct sale of high speed diesel to railways and others and pleaded that MRPL should be treated at par with other public sector oil marketing compnies like Indian Oil, Bharat Petroleum and Hindustan Petroleum.
''The government did not accede to the company's request, due to which the company had to take steps to reduce these supplies since April 2008 to restrict heavy under recoveries on these sales '', the annual report said.