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Tuesday, December 1, 2009

RIL stops gas by-product sales to Iran

Reliance Industries (RIL) has since April stopped selling gasoline and gas oil to Iran in an apparent bid to escape sanctions by the US, where it is eyeing an acquisition.

RIL till last year sold mostly gasoline to Iran but has since April this year completely stopped shipments from its twin refineries at Jamnagar in Gujarat, sources in the know said.

US is seeking to restrict gasoline supplies from refiners to Iran over its suspected nuclear weapons programme. Some US senators had proposed giving President Barack Obama the authority to impose sanctions against companies supplying gasoline to Iran.

RIL, which is looking to acquire US-based chemicals company LyondellBasell, however, continues to buy 5-6 million tonnes a year of crude oil from Iran.

The company sells fuel on Freight on Board (FOB) basis to traders with clear instructions to restrict sales of fuel to Iran, sources said adding there was no truth in the speculations being floated on RIL supplying gasoline to Iran.

Sources said it has even put a "destination restriction" on the fuel it sells to traders like Vitol, the said. The destination restriction means that the trader who buys fuel from RIL cannot sell it in Iran.

They said RIL sells fuel to traders with clear instructions that the final destination will not be Iran.

RIL's 1.24 million barrels per day Jamnagar refining complex in Gujarat exported 6.08 million tonnes of petrol and diesel in July-September quarter, up from 4.5 million tonnes in the previous quarter and 3.76 million tonnes a year ago.

Iran is the world's fourth-largest oil exporter but lacks the refining capacity to meet domestic demand.

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