GUWAHATI, Feb 17— The Bongaigaon Refinery and Petrochemicals Limited (BRPL), the only major industry in the backward lower Assam area, is facing crisis due to the wrong policies of the Government and the refinery may even face closure if the Central Government does not come forward to grant excise duty exemption and transport subsidy. For the first time in its history, the BRPL suffered a net loss of Rs 57.44 crore in the last financial year and for the current financial year, the estimated net loss will be to the tune of Rs 200 crore. According to figures available, the BRPL earned a net profit of Rs 61.06 crore in 1994-95 and it increased to over Rs 90 crore in the following year. But gradually the profit margin came down and the refinery had suffered a loss in the last financial year and failed to pay any divident. The capacity utilisation of the refinery also came down to 60 per cent in the last financial year and if the present position continues, it would be impossible for the refinery to survive in the years to come.
The BRPL, set up in 1979 with the initial capacity to process one million metric tonne of crude per annum (MMTPA) with the objectives of processing the additional crude oil available from the North-east oil fields, to promote industrialisation of the North-east through development of downstream industries, socio-economic development of the backward people, to create direct and indirect employment avenues and to promote ancilliary industries. The capacity of the refinery was increased to 1.35 MMTPA in 1987 and to 2.35 MMTPA in 1995. But unfortunately, the refinery was never utilised to its full capacity since then. It may be mentioned here that with the disinvestment of the government’s 74.46 per cent share holding, the BRPL became a subsidiary of the Indian Oil Corporation from March 29 last year.
Giving a detailed account of the problems being faced by the refinery at present, BRPL sources revealed that non-availability of North-east crude is one of the main problems faced by the refinery. Sources revealed that non-availability of adequate crude from the oil fields of the North-east forced the BRPL to import crude at a much higher cost. Sources revealed that the BRPL was originally designed to process crude oil produced in the oil fields of Assam, but the availability of Assam crude is not adequate to meet the requirements of the four refineries of the State. The short fall of Assam crude became more acute after the commissioning of the Numaligarh Refinery in 1999, which also eroded the profitability of BRPL. In the year 2000, in order to maximise the capacity utilisation of the refinery, it built up facilities to receive and process low-sulphur imported crude. However, import of crude through the Haldia port was not cost-effective and BRPL was forced to suspend processing imported crude in November last year. Sources said that under the present circumstances, BRPL would require at least 1.7 million tonnes of Assam crude annually to sustain its economic operations.
Locational disadvantage is another major problem faced by BRPL. Sources said that due to low industrialisation of the North-east region, a major quantum of the petroleum products of the refinery is to be moved out of the region. For sustaining economic operation of the refinery, it is necessary to reimburse the freight of transportation of the products from the refinery up to consumer points, sources said. Sources also revealed that BRPL has to spend between Rs 150 toRs. 212 crore annually for out-of-zone movement of petroleum products.
BRPL sources said that the refinery is not getting a level playing field as the benefits enjoyed by some of the major competitors are not extended to it. Sources revealed that some of the industries presently covered by the excise duty exemption scheme under the North-east industrial policy include Numaligarh Refinery Limited, Assam Petrochemicals Limited, Pragbosimi Synthetic Limited, Fertichem Limited, etc but the same benefits are not extended to the BRPL. Sources further revealed that some major industries are getting sales tax benefits in other States, which include Reliance Industries Limited in Maharashtra and Gujarat, IPCL in Maharashtra, Bombay Dying in Maharashtra, IOCL in Orissa, Reliance Petroleum in Gujarat etc. Sources said that all the industrial units located in the Kutch district of Gujarat are getting excise duty benefits.
Giving an account of the BRPL’s contribution to the exchequer over the years, BRPL sources said that the gross cumulative contribution of the refinery since its inception amounts to Rs 2311.22 crore, which include Rs 1065.97 crore in excise duty, Rs 317.83 crore in sales tax, Rs 115.42 crore in dividend paid to the Government of India, Rs 318.04 crore by way of disinvestment of government’s shares and Rs 493.96 crore in others. The refinery has also spent Rs 450 lakh so far in community development schemes in the locality.
The BRPL has moved the Prime Minister— Union Petroleum Minister, and different officials of the State and Central Governments for excise duty exemption for all finished products and transport subsidy for imported crude oil, all incoming raw materials and all outgoing products, but till date— the Central Government is yet to give any favourable response. The BRPL Revitalisation Action Committee has also requested the Members of Parliament from the North-eastern region to take up the matter with the Government of India, and it now remains to be seen whether the MPs can forcefully raise the issue in the interest of survival of BRPL.