The Petroleum and Natural Gas Regulatory Board (PNGRB) last month issued a notice to the declared 20 pipelines of IOC, accounting for <g data-gr-id="36">close</g> of half of the company’s pipeline capacity of 80 million tons, as <g data-gr-id="37">common</g> carrier by reserving some portion of lines for use by third parties.
The move would allow private firms like Essar Oil and Reliance Industries to get rights to move products on the 5,900-km network. The 20 pipelines have a combined capacity to move 38.59 million tons of products annually.
Strongly opposing the move, IOC in its comments on the proposal said all of the 20 pipelines are for captive use.
“IOC’s pipelines are not being used for <g data-gr-id="40">supply</g> of petroleum and petroleum products to any consumer,” it said adding all of them are dedicated pipelines being used for <g data-gr-id="41">captive</g> purpose. The pipelines, it said, originate from IOC’s refineries and terminate at the company’s depots. “These pipelines merely serve as a mode of evacuation and of stock transfer.” IOC said petroleum product pipelines are not natural monopolies as alternative modes of transport (rail/road) are available.
“It is not a case of natural gas pipelines where there is a natural monopoly as natural gas cannot be transported on land by any other modes. “Hence the basic criterion for bringing in competition for petroleum product pipelines is totally different, and as per that market dynamics, competition already exists in the market. Further IOC’s pipelines since inception are intended and being used for <g data-gr-id="46">captive</g> purpose,” the company said. IOC said its pipelines are not ‘common carrier’ under <g data-gr-id="44">provision</g> of the PNGRB Act of 2006 and the regulator’s authority in respect of those pipelines which are not covered within the definition of <g data-gr-id="45">common</g> carrier is limited.
“IOC’s pipelines are for captive use and as such dedicated pipelines under the 2006 Act. Without such dedicated pipeline, no refinery can be conceptualised and implemented on economic viability.
“If the pipelines are not treated as <g data-gr-id="35">dedicated</g> pipeline, then the entire refinery industry will be hampered adversely, leading to non-fulfilment of public requirement,” it said.