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Fri 16 May 2008, 08:32 GMT

IOC requests duty drawback on bunkers


State-owned firm calls for all-industry rates to make Indian bunker prices more competitive.

State-owned Indian Oil Corporation (IOC) has indicated that there is a need for a duty drawback for marine fuel and other petroleum products to increase the competitiveness of Indian supply firms in the international arena.

In a presentation to the Petroleum Ministry, IOC is reported to have pitched for all-industry duty drawback rates for the supply of bunker fuel and other petroleum products, so that the customs duty paid on crude oil does not lead to Indian oil marketing companies becoming less competitive internationally.

IOC is understood to have indicated that the price of bunker fuel was high and therefore uncompetitive on account of the customs duty paid on crude oil. This is turn was leading to shipping lines being less inclined to take supplies of marine fuel at indian ports.

According to IOC, the highly volatile nature of international petroleum prices should be reflected in all-industry rates of duty drawback as a percentage of the freight on board value of exports. IOC has therefore calculated the all-industry drawback rate based on the price of the Indian basket of crude oil and export of products between January and March this year.

IOC sold 58.3 million tonnes of petroleum products during 2007-08, registering a 8.7% growth in volumes as compared to the previous year. It operates refineries in Assam, Gujarat, West Bengal, Uttar Pradesh, Madras and Bihar and is the leading provider of fuel oil for the bunker market, supplying both marine fuel and lubricants to customers in all major Indian ports.

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