Import parity pricing till 1975
Administered Pricing Mechanism (APM)
Started in 1975 basis OPC recommendations
Modified in 1984 basis OCRC recommendations
Phased dismantling of APM
Commenced in 1998
APM for refineries and indl. products dismantled in 1998
Marketing of ATF deregulated in April 2001
Full dismantling effective April 2002
Evolution of
Pricing
Decontrol of Lube pricing in November 1993
Refinery transfer prices (RTP) of products on Import
Parity Principle (IPP)
RTPs of MS & HSD on Trade Parity effective June 2006
Limited subsidies on PDS SKO and Dom. LPG from
Govt. budget
Revision in selling prices of MS, HSD, PDS SKO & Dom.
LPG basis Govt. approval
Selling prices of other products market determined
Pricing Post APM Dismantling
Import Parity Pricing (IPP)FOB & Premium ($/bbl)
(Basis Published Quotes by Platts and Argus)
Ocean Freight ($/MT) (Middle East to Port Refinery Location)
Exchange Rate (Rs./$)(for conversion of $ prices to Rupees)
Import Duties (As applicable from time to time )
Import Incidental Elements(Ocean Loss, LC Charges, Insurance, Wharfage etc.)
= Import Parity Price
Export Parity Pricing (EPP)
FOB & Premium ($/bbl)(Basis Published Quotes by Platts and Argus)
Exchange Rate (Rs./$)(for conversion of $ prices to Rupees)
Advance Licence Benefit on Crude (Rs/KL)(Based on Custom Duty of Crude)
= Export Parity Price
Trade Parity Pricing (TPP)
80% of Import Parity Price
20% of Export Parity Price
= Trade Parity Price
Refinery Transfer Pricing
Port Refineries at Jamnagar, Mumbai, Kochi, Mangalore, Chrennai, Vizag & Haldia are the Primary Pricing Points.
Non refinery ports of Kandla and Paradeep also are the primary pricing points.
Smaller ports treated as secondary pricing points & linked to Primary Pricing Points e.g.
Goa - Mumbai plus Coastal Freight Tuticorin - Chennai plus coastal freight
NE Refineries are at par with Haldia RTP.
Refinery Transfer Pricing
Refinery Transfer Price for Inland refineries (Koyali,Mathura etc) based on RTPs of nearest primary port plus Inland freight differential :
MS & HSD & LPG - 75% of railway freight for rail distance from nearest primary pricing port
SKO – 90% of railway freight for pipeline distance from nearest primary pricing port
Other Products – Lumsum amount for inland freight differentials
Refinery Transfer Pricing
Periodicity of Revision:
RTP of MS, HSD, FO & LSHS, Naphtha,
Bitumen, ATF(Domestic) etc. revised fortnightly
RTP of ATF (International), SKO & LPG revised
monthly
RTP of Speciality Products – Hexane, Solvant,
JBO,MTO etc.are revised Monthly.
Refinery Transfer Pricing
MS BS II Mumbai
FOB AG(Including Prem.) $/BBL 72.77
Freight (Sitra to Indian Port) $/BBL 0.92
C&F Price $/BBL 73.69
Rs./KL 22407.15
Custom Duty Rs./KL 583.34
Other Charges (Insurance, Ocean Loss etc.) Rs./KL 229.80
IPP Rs./KL 23220.29
Buildup of RTP as on 1st July 09
MS BS II Mumbai
FOB AG(Including Prem.) $/BBL 72.77
FOB Price Rs./KL 22128.29
EPP Rs./KL 22128.29
RTP Rs./KL 23001.91
Buildup of RTP as on 1st July 09
Quality premium factor is added to BS II RTP to workout EURO III RTP.
Mumbai
FOB AG(Including Prem.) $/BBL 78.54
Freight (Sitra to Indian Port) $/BBL 1.05
C&F Price $/BBL 79.59
Rs./KL 24124.07
Custom Duty Rs./KL 628.03
Other Charges (Insurance, Ocean Loss etc.) Rs./KL 250.30
IPP Rs./KL 25002.40
HSD BS II
Buildup of RTP as on 1st July 09
HSD BS II Mumbai
FOB AG(Including Prem.) $/BBL 78.54
FOB Price Rs./KL 23806.02
EPP Rs./KL 23806.02
RTP Rs./KL 24763.12
Buildup of RTP as on 1st July 09
Quality premium factor is added to BS II RTP to workout EURO III RTP.
Component Amount% of RSP
Basic Price 22.15 50
Excise Duty 13.75 31
Sales Tax 7.44 17
Dealer Commission 1.05 2
Freight & Others 0.24 0
Total Retail Selling Price 44.63 100
Taxation contributes to 48% of RSP of MS
Composition of RSP of MS at Delhi As on 2nd July 2009
Component Amount% of RSP
Basic Price 24.39 74
Excise Duty 3.71 11
Sales Tax & Air Ambiance charges 3.90 12
Dealer Commission 0.63 2
Others 0.24 1
Total Retail Selling Price 32.87 100
Composition of RSP of HSD at Delhi As on 2nd July 2009
Taxation contributes to 23% of RSP of HSD
Govt. Subsidy
on
PDS SKO & Domestic LPG
Issue Price
Ex- Storage Selling Price
Notional Rail Freight
Cost Price
RTP at Port Refineries
Freight from Port to inland depots/ LPG plants
Terminalling Charges
Mktg. Cost & Margins
LPG Bottling Cost & Cyl. Depreciation
Subsidy = Cost Price - Issue Price
Subsidies on SKO & LPG
Under Recoveries
on
Sensitive Products
Domestic Product Prices
OMCs paying Trade/ Import parity prices to refineries for
supply of products
Consumer prices of Sensitive products not being
maintained in line with Trade/ Import parity prices
resulting in under recoveries to OMCs due to:
Non recovery of cost of products
Non realization of margins allowed
Rising Under Recoveries
Rs.Crs
Industry U/R : 20146 40000 49387 77123 103292
21311OMC
Compensation of Under Recovery
Subsidy Sharing Mechanism commenced in 2003-04 with
1/3 sharing of under recoveries by Upstream Companies
Restricted to under recoveries on PDS SKO & Dom. LPG
Effective 2004-05, upstream sharing extended to MS / HSD also
In view of the adverse financial position due to increasing under
recoveries, Govt. started issuing oil bonds to OMCs.
Bonds Received by OMC Rs. Crores
2005-06 23452006-07 49302007-08 7703
2008-09 14693
Mumbai
FOB AG $/MT 389.13
Freight (Sitra to Indian Port) $/MT 11.56
C&F Price $/MT 400.69
Rs./MT 19308.78
Custom Duty Rs./MT 1048.80
Other Charges (Insurance, Ocean Loss etc.) Rs./MT 291.23
RTP (Rounded off)(Next Re10) Rs./MT 20740.00
FO (380 CST Dom.)
Buildup of RTP as on 1st July 09
Marketing Cost & Margin of Rs. 2090/MT is added to RTP to workout BCSP.
Mumbai
FOB AG $/MT 389.13
Freight (Sitra to Indian Port) $/MT 11.56
C&F Price $/MT 400.69
Rs./MT 19308.78
Custom Duty Rs./MT 0
Other Charges (Insurance, Ocean Loss etc.) Rs./MT 291.23
RTP (Rounded off)(Next Re10) Rs./MT 19690.00
FO (380 CST Int.)
Buildup of RTP as on 1st July 09
Marketing Cost & Margin of Rs. 2090/MT is added to RTP to workout BCSP.
Mumbai
FOB AG $/MT 391.91
Freight (Sitra to Indian Port) $/MT 11.56
C&F Price $/MT 403.47
Rs./MT 19462.19
Custom Duty Rs./MT 1055.78
Other Charges (Insurance, Ocean Loss etc.) Rs./MT 272.58
RTP (Rounded off)(Next Re10) Rs./MT 20880.00
CBFS
Buildup of RTP as on 1st July 09
Marketing Cost & Margin of Rs. 1000/MT for Carbon & Rs 4000 for Non Carbon Black Manufactures is added to RTP to workout BCSP.
Buildup of RTP as on 1st July 09
RPO RTP
Divide : Conversion factor of 1.01
= RTP of RPO ( in KL) (Rounded off) )(Next Re 10)
RTP of CBFS (in MT)
Mumbai
FOB AG $/MT 391.91
Freight (Sitra to Indian Port) $/MT 11.56
C&F Price $/MT 403.47
Rs./MT 19442.75
Custom Duty Rs./MT 1055.78
Other Charges (Insurance, Ocean Loss etc.) Rs./MT 292.33
Add : Additional Margin Rs./MT 1500.00
RTP (Rounded off)(Next Re10) Rs./MT 21380.00
LSHS (Fert. & Non Fert.)
Buildup of RTP as on 1st July 09
Marketing Cost & Margin of Rs. 3090/MT is added to RTP to workout BCSP.
Mumbai
FOB AG (Including Premium) $/MT 581.62
Freight (Sitra to Indian Port) $/MT 7.82
C&F Price $/MT 589.44
Rs./MT 28404.29
Custom Duty Rs./MT 1593.47
Other Charges (Insurance, Ocean Loss etc.) Rs./MT 377.55
RTP (Rounded off) Rs./MT 30980.00
Naphtha NF
Buildup of RTP as on 1st July 09
Marketing Cost & Margin of Rs. 3040/MT is added to RTP to workout BCSP.
Mumbai
FOB AG (Including Premium) $/MT 581.62
Freight (Sitra to Indian Port) $/MT 7.82
C&F Price $/MT 589.43
Rs./MT 28404.29
Custom Duty Rs./MT 0
Other Charges (Insurance, Ocean Loss etc.) Rs./MT 377.55
RTP (Rounded off) Rs./MT 29390.00
Naphtha Fer.
Buildup of RTP as on 1st July 09
Marketing Cost & Margin of Rs. 2440/MT is added to RTP to workout BCSP.
Mumbai
FOB AG (Including Premium) $/MT 627.27
Freight (Sitra to Indian Port) $/MT 7.82
C&F Price $/MT 635.09
Rs./MT 30604.29
Custom Duty Rs./MT 0
Other Charges (Insurance, Ocean Loss etc.) Rs./MT 377.55
RTP (Rounded off) Rs./MT 29390.00
Naphtha For Power Plant
Buildup of RTP as on 1st July 09
Marketing Cost & Margin of Rs. 3040/MT is added to RTP to workout BCSP.
Mumbai
FOB AG of Naphtha(Monthly) $/MT 568.34
Add : Escalation @ 27% $/MT 153.45
Add : Premium of Naphtha $/MT 46.10
Freight (Sitra to Indian Port) $/MT 7.82
C&F Price $/MT 775.71
Rs./MT 37380.62
Custom Duty Rs./MT 1946.30
Other Charges (Insurance, Ocean Loss etc.) Rs./MT 433.47
Less : Premium Adjustment Rs./MT 750.00
RTP (Rounded off) Rs./MT 39020.00
Hexane/Solvant 1425
Buildup of RTP as on 1st July 09
Mumbai
FOB AG $/MT 392.50
Freight (Sitra to Indian Port) $/MT 15.00
C&F Price $/MT 407.50
Rs./MT 19656.70
Custom Duty Rs./MT 1977.88
Other Charges (Insurance, Ocean Loss etc.) Rs./MT 287.05
Less : Package Differential Rs./MT 1710.00
RTP (Rounded off) Rs./MT 20200.00
Bulk Bitumen Grade- ( 60/70)
Buildup of RTP as on 01July 09
Mumbai
RTP of FO Rs./KL 20035.00
RTP of FO (Con. Factor 1.0424) Rs./MT 20884.48
RTP of HSD BS II Grade Rs./KL 24699.87
RTP of HSD Grade(C. V. 1.99) Rs./MT 29615.34
RTP of FO Grade (100 % FO + 25% HSD) Rs./MT 28288.32
Conversion Factor (MT to KL) 1.3422
RTP of FO Grade Rs./KL 21076.84
Add : Processing Cost Rs./KL 120.00
RTP Rs./KL 21196.84
RTP (Rounded off) Rs./KL 21200.00
LVFO/FO 600
Buildup of RTP as on 1st July 09
Mumbai
80 % of Avg. RTP of HSD Rs./KL 19653.82
20% of Avg. RTP of Fo Rs./KL 4046.29
RTP of LDO(R/off) Rs./KL 23710.00
Add : Marketing Cost & margin Rs./KL 6260.00
BCSP of LDO Rs./KL 29970.00
LDO
Buildup of RTP as on 1st July 09
Mumbai
FOB (based on Singapur) $/MT 672.50
Freight $/MT 25.00
Insurance & Landing Charges $/MT 17.44
CIF Price $/MT 714.94
Custom Duty $/MT 35.75
Port Price $/MT 750.59
Rs/MT 40632.00
Port Price (CF 0.8938) Rs/KL 32562.00
Less : Quality Correction Rs/KL 1410.00
Less : Sales Tax Reduction Rs/KL 1198.00
RTP (Rounded off) Rs/KL 30000.00
LOBS – SN 500
Buildup of RTP as on 1st July 09