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statesman · Posted: Tue Mar 27, 2007 11:19 pm Post subject:

HPCL and Ravva JV reach settlement over pricing of crude

March 25: HPCL and the Ravva JV have finally found a middle ground to their long standing dispute on the delivery point of crude, the conversion factor taken into account to determine the quantity of crude and payment of VAT on the crude sold. Differences arose when the Ravva JV billed HPCL according to the quantity supplied as measured at the JV's onshore tanks and recorded in the B/L but the public sector refiner refused to pay up on this basis on the claim that in-transit losses were higher than expected. The dispute got mired in arbitration. Other grievances were added on at a later date. But HPCL has now decided to sort out the differences after Cairn Energy, the operator of the Ravva JV, send in a demand to the petroleum ministry for some other company to be nominated as a crude offtaker in place of HPCL on account of persisting differences. What made matters more complicated was the fact that BRPL -- another purchaser of Ravva crude -- had been paying up in terms of conditions set by the seller. HPCL has now agreed to accept the B/L quantity as the basis for payment from April 1, 2003, when the refiner was nominated as the official offtaker. Furthermore, an amount of Rs 8.15 crore plus applicable sales tax/VAT will be paid as differential for the period April 1, 2003 to November 30, 2006. Click on Details for more on the agreement. Details
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STATESMAN