The Hindu Business Line : MRPL seeks higher prices for Euro-III grade fuel

MANGALORE Refinery and Petrochemicals Ltd (MRPL), which recently upgraded its facilities to produce Euro-III grade fuel, has demanded a higher price for such value added products from the petroleum retailing companies.

An ONGC subsidiary, MRPL claims to be the first refinery to upgrade its facilities to produce Euro-III grade fuel.

Though it started limited despatches of Euro-III diesel to Bangalore through Petronet Mangalore Hassan Bangalore Pipeline Ltd (PMHBPL) beginning December 31, MRPL has declined to commence large-scale production of cleaner fuel in the absence of fresh pricing agreements.

As per the National Auto Fuel Policy, 2003, use of Euro-III fuel is mandatory in 11 major cities, including Delhi and Bangalore beginning April 2005.

The policy recommended use of cleaner fuel of the grade of Euro-III & IV in the entire country by 2010 requiring an estimated total investment of over Rs 40,000 crore by refineries and automakers to upgrade their facilities accordingly.

MRPL has already rolled out a Rs 600-crore investment plan to upgrade its facilities to produce Euro-IV diesel and motor spirit by 2007.

Talking to newspersons here today, Dr A.K. Balyan, Director (HR, business development and joint venture) of ONGC, said that the company was negotiating fresh pricing agreement with the petroleum retailing companies.

"There is consumer demand for cleaner fuel. Having upgraded our facilities to meet consumer expectations we are now waiting for a pricing mechanism to ensure better realisation for our produce."

Dr Balyan was in the city in connection with a road show for `Petrotech 2005'. The four-day long international petroleum conference and exhibition will be organised by ONGC in Delhi beginning January 16.

About the company's plans on petroleum refining, Dr Balyan said that though ideally ONGC would like to refine its entire crude production and retain the gross refining margin (GRM) with the company, "there is no immediate plan for setting up additional refining capacity."

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