Tamil Nadu

Petroleum dealers, LPG distributors worried over CPCL production cut

A view of Chennai Petroleum Corporation Limited (CPCL) at Manali in Chennai. File

A view of Chennai Petroleum Corporation Limited (CPCL) at Manali in Chennai. File | Photo Credit: B. Velankanni Raj

Petroleum dealers and cooking gas distributors in Tamil Nadu are worried about the possible fallout of Chennai Petroleum Corporation Limited refinery being directed to reduce its production to 75% of capacity by the Tamil Nadu Pollution Control Board (TNPCB).

The Tamil Nadu Petroleum Dealers Association said that the refinery in Manali, near here, operating to only 75% of capacity might lead to shortfall in the availability of fuel at retail outlets. “The impact is yet to be felt since all oil companies have a few days of backup. But oil companies must ensure that consumers are not affected in any way due to this development,” Association State president K.P. Murali said.

The 10.5 million tonne refinery is crucial to maintaining petrol, diesel and liquefied petroleum gas (LPG) supplies in Tamil Nadu and neighbouring States. Naphtha, furnace oil, bitumen, lube and wax are some of the other products it produces. LPG distributors said they were worried about the direction asking CPCL to produce less. “We don’t know how this is going to be implemented. If the company reduces the production of critical products, it would affect LPG consumers in a major way. CPCL supplies LPG to the IOTL in bulk, which in turn supplies to bottling plants. If this is affected, then LPG supplies might be affected,” said a distributor.

The Chennai Candle Makers Welfare Association has expressed concern too. “The business has become very bad now. We used to have 200 units earlier, we now have only 70 units. We have business only during three months a year since people have mobile phones that have lights. Already wax costs ₹1.56 lakh per tonne. We also have 18% GST, which is pretty unfair, adding to our burden. Now if wax is not available and with Karthikai and Deepavali nearing, it will cause further problems to candle units,” A.V. Giri, association president.

An industry expert said that though refineries usually shut down once in four to five years for maintenance, it is done in such a manner that those who depend on it for products are not affected. In this case, such prior arrangements cannot be done, he pointed out.

Meanwhile, the company has informed the National and Bombay stock exchanges of the TNPCB’s advice to restrict its production to 75% of its regular production. “In line with the advice of the TNPCB, the production has been reduced on a temporary basis. The management is confident of resolving this issue at the earliest,” it said in the letter.

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Printable version | Aug 17, 2022 1:05:30 pm | https://www.thehindu.com/news/national/tamil-nadu/oil-industry-associations-worried-over-cpcl-being-told-to-restrict-production/article65751110.ece