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Reliance Petroleum
Reliance Petroleum Limited was set up by Reliance Industries Limited (RIL), one of India's largest private sector companies based in Mumbai. Currently, RPL is subsidiary of RIL, and has interests in the downstream oil business. RPL also benefits from a strategic alliance with Chevron India Holdings Pte Limited, Singapore, a wholly owned subsidiary of Chevron Corporation USA (Chevron), which currently holds a 5% equity stake in the Company.

Failure of Reliance Petroleum Reliance Industries to shut its retail petrol pumps
Reliance Industries, the countrys largest private sector company, has decided to shut down all the petroleum retail outlets owned by it directly as surging crude prices and the absence of government subsidies have made operations unviable. We are kept out of the ambit of the government-sponsored survival package. We have decided to close all our company-owned retail outlets. It has become unviable to transport fuel from our depots to retail outlets as the throughput from our retail outlets has almost become zero. We are not going to re-fuel any of our retail outlets and this will eventually lead to clousure of such outlets till stocks last, a source close to the development told ET. A Reliance spokesperson declined to respond to an ET questionnaire on the issue. RIL operates about 1,400 retail outlets. It owns most of these outlets after it decided to buy out several outlets being operated by the dealers. The source told ET that the outlets operated by the dealers will continue to function. RIL achieved a fair amount of success in the petroleum retail market, gaining a market share of over 14% in no time. RILs outlets were selling almost four times the average sales of PSU outlets till May 2006. The sales volumes of RIL outlets fell significantly after the price increase. Over 50 lakh customers who had been patronising RIL outlets known for their quality and quantity assurance switched to other outlets. The price differential between private and public companies kept widening because of oil bonds for state-owned oil marketing firms and discounts from upstream oil companies. At present, RIL sells petrol and diesel at between Rs 6 and Rs 14 more than PSUs. This drove away customers, forcing the pumps to go dry. Even with this differential, RIL is incurring substantial losses in retail marketing. Further, this in

turn has affected the operations and consequent revenues of the company. Its market share, which stood at 14%, has dropped to nil after the price differential with PSUs. Asked if the company would consider selling off its petroleum retail operations, given that the government cap on pricing continues, We remain committed to the petroleum sector and will not sell our retail operations. The lack of a level-playing field between the public and private sector remains an area of concern, and we look forward to the its restoration as soon as it is possible so we can to resume our retail petro operations, said the source. RIL, along with other private sector firms like Essar Oil and Shell, is lobbying hard for equal treatment with OMCs, including access to oil bonds issued by the government to underwrite the subsidy cost of selling petroleum products at a concessional price.

Reliance Petroleum loses Rs. 515 cr. on exports of petrol, diesel NEW DELHI, JULY 8. Reliance Petroleum (RPL) lost Rs. 515 crores on "forced" exports of 2.725 million tonnes of petrol and diesel during 2000-01 fiscal as "it was denied fair access to the domestic controlled market". RPL lost Rs. 468 crores on "forced" exports of 1.597 million tonnes of diesel and Rs. 47 crores on export of 1.128 million tonnes of petrol in 2000-01, the company said in a recent presentation to Mr. Ram Naik, Union Petroleum Minister.The denial of fair access to the domestic controlled market was forcing it to export petroleum products at lower price, the presentation said adding only 38 per cent of petrol and 84 per cent of diesel produced by RPL was absorbed domestically as against almost 100 per cent by other public sector refiners.RPL said capacity expansion of national oil refineries by 22 million tonnes, after commissioning of its 27 million tonnes Jamnagar Refinery in Gujarat in July 1999, had resulted in oversupply situation and adversely affected product offtake from its refinery. The presentation claimed that RPL was being treated as a balancing (swing) refinery with products absorbed only when PSEs do not produce or they are shut down. "On every occasion the penalty for RPL increases, since RPL is forced to export largely when prices are adverse," the company said demanding equitable domestic absorption of controlled products (petrol, diesel, LPG and kerosene) and a level playing field vis-a-vis public sector refineries. Accusing the Government of backtracking on its February 26, 1999, pledge to treat RPL on par with its public sector rival, RPL said "all PSE refineries/expansions had been given full domestic absorption even if they were commissioned after RPL." Without naming them, the Reliance representation criticised failure of Indian Oil Corporation (IOC), Bharat Petroleum Corproation (BPCL) and Hindustan Petroleum Corporation (HPCL) in offtaking product from its refinery

despite Government assurance that IOC would offtake 50 per cent of Jamnagar production while the rest would be done by BPCL and HPCL. "Products with negative tariff protection - kerosene for public distribution system (PDS) and domestic LPG (cooking gas) - are selectively absorbed from RPL while products with compensating tariff protection - diesel and petrol - are not fully absorbed. RPL is compelled to export these products at heavy penalties," the presentation said. During July-September 2000, RPL exported 4.44 lakh tonnes of diesel at a loss of Rs. 29 crores over the domestic price. It lost Rs. 1 crore on export of 3.41 lakh tonnes of petrol during the same period, the presentation said. In October-December 2000, the company lost Rs. 365 crores on export of 9.28 lakh tonnes of diesel and Rs. 45 crores on export of 3.72 lakh tonnes of petrol, while in the last quarter of 200001 fiscal, the company lost Rs. 75 crores on export of 2.24 lakh tonnes of diesel and Rs. 17 crores on export of 2.95 lakh tonnes of petrol. Power ministry blames oil officials for NTPC-RIL deal NEW DELHI: The power ministry is blaming the petroleum ministry for dragging its feet on the issue of getting Mukesh Ambani-controlled Reliance Industries (RIL) to sign a formal agreement for selling natural gas to state-owned generation utility NTPC Ltd. "We have been writing to the petroleum ministry repeatedly since September but it has not shown the required alacrity. Reliance has influence in the top levels of the government and our fear is that the petroleum ministry may help it to wriggle out of the commitment made to NTPC," a top power ministry official told The Times of India. Power secretary RV Shahi had first written on the issue to his counterpart in the petroleum ministry, SC Tripathi, in September. This was followed by several other letters, including one in which he sought review of RIL's exploration licence. Admitting that the conditions in the agreement set by NTPC were tough, the official said it was an open tender and RIL knew what it was getting into when it bid for the tender to supply gas for 17 years. ... ... "How does NTPC climb down? People will laugh...it will have to face vigilance, Parliament. Tomorrow, those who had pulled out because of these conditions can go to court." The main bone of contention is the issue of liability in case of supply failure. NTPC's letter of intent (LoI) stipulates unlimited liability, which Reliance says will make the gas project unbankable. RIL had accepted the LoI on the condition - and in its words, "assurance from NTPC" - that this concern will be addressed. RIL wants the liability capped at $250 million and has offered first right to NTPC on gas from its other fields as well as a commitment to supply alternative fuel at natural gas prices prevalent on the day of signing the agreement.

"What is to stop Reliance from paying its capped liability and sell the gas at a higher price to others." the official asked and said the company's valid concerns have been taken care of. "If supply failure is due to natural calamity, NTPC will understand. But if failure is because RIL has committed others more gas than it has, then it is man-made situation it will have to bear unlimited liability." Inspection reports on Reliance sent to Sebi: DCA NEW DELHI: The Department of Company Affairs has sent inspection reports on Reliance Industries, in which it detected violation of the Companies Act by Reliance Petroleum, to market watchdog Sebi. "Sebi had requested relevant information once we completed investigation into the Reliance case and we have sent these reports to the market watchdog," DCA Secretary V K Dhall told reporters here. During its investigation, DCA had found that Reliance Petroleum violated the Companies Act by not circulating information about dealings in shares of Reliance Industries and another group company in its balance sheet for 1994-95. The inspection of the books of accounts, ordered by DCA in September last year, concluded that "the company (RPL) has thus violated provisions of section 211 read with Schedule VI of the Act. No information relating to dealing in shares of RIL and RCL was furnished in the balance sheet circulated amongst the shareholders." In its submission to DCA inspection, Reliance Petroleum admitted that "unfortunately, however, a printing error had crept in resulting in omission of one line at the end of Page No 13 in the printed accounts... This omission is sought to be blown out of proportion by the complainant to say that the company circulated two sets of balance sheets for the year ended 31 March 1995." Following complaints from BSP MP Rashid Alvi that RPL had violated the Act and diverted public money (about Rs 1,000 crore) for speculative activities, DCA ordered full-fledged inspection of RPL and limited inspection of five other group companies including RIL on top priority basis. Sebi probes trading in Reliance Petroleum MUMBAI: Market regulator Securities and Exchange Board of India (Sebi) is investigating the alleged insider trading activities in the shares of Mukesh Ambani-run Reliance Petroleum, Rajya Sabha was informed on Tuesday. "Sebi has informed that it has initiated an examination in the matter," minister of state for finance P K Bansal said in a written reply in the Rajya Sabha. Bansal was replying to a query by Amar Singh of Samajwadi Party on whether the government had taken any action against the promoters/affiliates of Reliance Industries regarding the recent mammoth insider trading activities in the shares of Reliance Petroleum. On November 24, 2007, Reliance Industries raised Rs 4,023 crore by divesting a 4% stake in Reliance Petroleum, the company had said after the stake sell. While actual date for the stake sale is not known yet, the stock price of Reliance Petroleum had

moved by a wide margin between late October and early November. On the Bomaby Stock Exchange, the scrip price had moved from Rs 167.95 on October 22 to Rs 269.70 on November 2, a rise of over 60% in just 10 trading sessions. During the corresponding period, BSE sensex had moved up by about 13%. Reacting to the statement by Bansal, in a written statement, Reliance Industries said the company and its group firms "have complied with all rules and regulations and will cooperate and provide all the necessary information to the concerned authorities."

REMEDIES Merging would be ideal to gain more market strength. Follow the price of government owned petrol pumps. Provide better quality service at the petrol pumps.