Reliance signs fuel supply deal with HPCL

India’s Reliance Industries Ltd. said it has closed a fuel supply deal with state-run Hindustan Petroleum Corp. Ltd. (HPCL) which will allow Reliance to sell products from its Jamnagar I refinery in western India to HPCL. It also aims to source a million tons of fuel by September, HPCL said, adding that it may likely buy 180,000 metric tons of products a month from Reliance under the contract, or 2.16 million tons a year. Reliance would supply product at a discount to the Indian pricing formula, which is 80% import cost and 20% export price of the product. This could be the first deal Reliance signs with local fuel retailers after ending the export-only status of its 660,000-barrel-a-day Jamnagar I refinery in April 2009, reports said. The end of the export-oriented unit (EOU) status could significantly reduce the company’s gasoline and diesel exports, and reduce India’s spot imports of petroleum products, as other fuel retailers are likely to enter into similar deals with Reliance. (May 5, 2009)