Indian government has asked yesterday to stop retailing locally produced liquefied petroleum gas (LPG) to Reliance Industries.
This is a grave news for Reliance Industries, as Reliance Industries has a vast network that supplies cooking gas to more then 1 million customers.
Indian Govt. Officials said the sale violated an oil ministry's LPG control order, this directive mandates that all cooking gas produced in India must be supplied to state-run oil retailing companies.
As per the govt, state-run oil companies are forced to import a part of the nations LPG requirement.
A senior oil ministry official also said that RIL is accused of selling LPG produced in Jamnagar, Hazira and Patalganga plants to retail customers, as per oil ministry this is a clear violation of the mandate.
Oil ministry officials did confirmed that Reliance had contested the government's directive in a presentation made in Nov 19.
Reliance Industries had told the ministry that it was forced to sell domestic LPG in because state oil marketing firms were not willing to pay market rates.
Reliance LPG has most of the customers in rural areas of Maharashtra, Rajasthan, Madhya Pradesh and Gujarat. Reliance Industries LPG network is mostly strong in rural areas and has around 150 auto LPG outlets. It is to note that the company is also marketing auto LPG in markets, which are not served by outlets of state oil companies.
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