NEW DELHI: Nagarjuna Oil Corp (NOCL) has signed a fuel sales deal with the country’s biggest refiner Indian Oil Corp, a move which could reduce import dependence for meeting refined products demand in the southern part of the South Asian nation.
India has surplus refining capacity but its private refiners prefer to export or sell in local markets through state-run firms, which only get compensation from the government for sale of fuel at subsidised rates.
Oil trader Trafigura has just bought a 24 per cent stake in Nagarjuna’s 120,000 barrels per day refinery in the southern Tamil Nadu state,India’s third privately-owned coastal plant after Reliance Industries and Essar Oil.
The refinery will be commissioned later this year. The agreement would help cut the current deficit of about 3 million tonnes for supplies of gasoline, diesel and liquefied petroleum gas (LPG) in the state, NOCL said in a statement.
“The NOCL Refinery is designed to produce around 2.7 million tons of Diesel, 0.8 million ton of Petrol, and 0.7 million tons of LPG, which would be sufficient to bridge this deficit,” it said.