The Hindu Business Line : Call for easier norms to allot duty-free fuel to exporters

The Ministry, in close association with the Petroleum Ministry, proposes to review the existing norms to facilitate easier off-take by exporters and also enable a more realistic assessment of their requirement.

The Ministry, in its communication to the Petroleum Ministry, is understood to have emphasised that the earlier system of releasing duty-free imported fuel to exporters through specified outlets of oil marketing companies (OMCs) be restored, as exporters were finding it difficult to meet their requirement under the current system.

As per the existing advance licensing scheme, duty-free fuel is allowed based on quantities indicated in the relevant standard input-output norms.

The duty-free fuel is only at the refinery level. The exporting community is complaining of logistics problems because of this system.

Besides, small exporters were unable to buy full tanker loads of fuel from refineries.

The earlier system of getting duty-free fuel from all dispensing stations nominated by the OMCs enabled even small exporters, having entitlement under the advance licensing scheme or duty-free replenishment certificate scheme, to utilise their entitlements without difficulty.

Following a representation from exporters, the Commerce Ministry is understood to have raised it with the Petroleum Ministry.

The exporters have been complaining that existing norms were proving to be a hurdle in their efforts to sell products in the overseas market, as it was adding to cost disabilities and making them non-competitive.

The Ministry proposes to have a fresh look at the product group or industry wise norms to make them more realistic as per actual requirement.

To make the entitlement further focussed, the Ministry feels that it may be necessary to make a few sub-categories inside every product group.

According to exporters, the 3-7 per cent norm for various products was grossly insufficient to meet the actual requirement.

There are certain industries, like aluminium, where fuel/energy requirement constitutes 60 per cent of the product cost.

Similarly, chemicals, textiles, leather, ferrous engineering and others have requirement much higher than the permitted seven per cent.

This, according to exporters, was adding to the cost disabilities.

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