Indian Oil nears term deal for 720,000 tonne fuel exports to Mauritius:
21 Aug 2020
State-run oil refiner Indian Oil Corporation (IOC) is expected to win an export contract from Mauritius for up to 720,000 tonnes of clean fuels, under an annual deal from November, reports citing sources said.
IOC, which sells most of its fuel in the local market, besides supplying its retail outlets in Nepal and Bhutan, is looking to other markets amidst falling local demand due to Covid-19 related lockdown and weak margins.
IOC mostly stays away from participating in term tenders for fuel exports amidst mounting inventories caused by the prolonged lockdown of the economy.
IOC, the country’s top refiner, had reported a 47 per cent drop in its April-June net profit. The company is attempting to lock in sales of its fuels.
IOC this year also won its first contract to supply fuels to Bangladesh.
IOC reported a standalone net profit of Rs1,910.84 crore for the April-June quarter, which was 46.8 per cent lower compared to the Rs3,596.11 crore net profit reported in the similar quarter of the previous fiscal, the company said in a regulatory filing.
The contract is for supply of 205,000 tonnes of 95 RON gasoline, 235,000 tonnes of 10 ppm gasoil, 175,000 tonnes of jet fuel and up to 105,000 tonnes of marine gasoil, to be delivered at Port Louis in Mauritius, reports said.
IOC is reported to have placed the second lowest premium on gasoline after OQ Trading and the lowest premiums on other fuels to emerge the frontrunner for the annual tender.
IOC has offered to sell fuels at premiums of $50.15 per tonne for gasoline, $3.58 per barrel for gasoil, $3.22 per barrel for jet fuel and $5.91 per barrel for marine gasoil, reports said.
Other companies bidding for the term contract tender issued by State Trading Corp of Mauritius included France’s Total, Sahara Energy Resources Ltd and Vitol, according to reports.
Mangalore Refinery and Petrochemicals Ltd supplied Mauritius’ full requirement for fuel for around 12 years until 2018-19. In 2019-20 Petrochina and Vitol were the fuel supply contractors.
IOC also runs IndianOil (Mauritius) Ltd (IOML), a wholly owned subsidiary, which is also the third largest petroleum company in Mauritius. IOML commenced marketing operations in Mauritius in January 2004, IOML has an overall market share of 24 per cent. IndianOil’s presence in Mauritius is also of strategic importance to penetrate and explore marketing opportunities in the African countries and nearby islands.
IOML sells a range of products, including automotive fuels, aviation fuel, marine fuels, and SERVO Lubricants.
IOML also operates a modern petroleum bulk storage terminal at the Mer Rouge port, besides 17 filling stations. There is considerable expansion of retail network ongoing in Mauritius.
IOML has significant presence in the marine bunker business in Mauritius. It is in the process of enhancing its infrastructure at Port quays to meet the future growth needs of this bunkering port.
IOML commands the dominant share of 42 per cent, in the aviation fuel business and supplies jet fuel to many renowned airlines. It also has 25 per cent equity in the new petroleum terminal at the Sir Seewoosagar Ramgoolam International Airport.