To protest the move of Indian oil, ASSU will organize at human chain in Oil township of Digboi. The student body has been demanding that the autonomy of the AOD must be not be diluted. The marketing operations of AOD and IndianOil’s Marketing Division in the North-Eastern States have been integrated with effect from April 1, 2008.

NRL announced, “After successful commissioning of the refinery, NRL commenced production from the year 2000. With authorization from the Government of India, NRL ventured into retail marketing from the year 2004. NRL has set up 108 retail outlets in the country, majority of which is in the North East. Customers’ response has been very encouraging and NRL has become an established brand in petroleum retailing,” it stated.

The statement further said there has been a phenomenal rise in crude price during the last one year and in case of NRL, the price has gone up from the level of $68.66 per barrel freight on board (FOB) in April 2007 to $111.94 per barrel FOB in April 2008 and the prices continue to show rising trend.

While this amounts to an increase of around Rs 11/- per litre in the crude price, the increase in the Retail Selling Price has been only marginal to the tune of Rs. 2/- per litre in petrol and Re. 1/- per litre in diesel effected in February, 2008. This has resulted in huge losses to companies engaged in petroleum retailing. The current loss for the industry as reported is around Rs. 14/- per litre for petrol and Rs. 21/- per litre for diesel, it said.

It observed that ,”NRL is not given compensation against retail marketing losses in the form of discount in crude oil purchased from OIL and ONGC as well as Oil Bonds received from Government of India. Due to non availability of any such compensation mechanism, the retail marketing losses of NRL havebeen mounting over the years and based on the current situation, if retail prices are not increased correspondingly, the retail marketing losses for NRL may go up to Rs. 400 to 500 crores , in the financial Year 2008-09.

It felt that such huge losses, if continued, may even outstrip the profit generated from the refinery thereby making NRL economically unviable. In order to prevent such a situation, NRL is being left with no other alternative but to consider increase the retail prices of petrol and diesel, at least to partially reduce the retail marketing losses, it reasoned.

NRL recorded the highest ever throughput of 2,504 million metric tones (MMT) and also registered the record profit after tax of Rs 568.80 Crores in 2006-07. During 2006-07 the sales turnovers witnessed a growth of 36.25 percent and touch a level of of Rs 7930.32 Crores while in 2005-06, sales turnover was around Rs 5820.37 Crores.

The refinery has been able to process 2,504 MMT of crude during 2006-07 as against 2.133 MMT in the previous year, which is highest ever recorded since commissioning of the refinery in the year 2000.

AASU has asked the NRL to desist from raising the price of its petroleum products. The body asked the Centre to compensate the NRL’s losses as it had been doing in the case of other oil PSUs.

Assam chief minister, Tarun Gogoi had moved petroleum minister, Murli Deora opposing the integration the AOD. The chief minister had asked Mr Deora to ensure that the autonomy of the AOD is maintained and the company’s emblem, the charging one horn Rhino is also kept intact.

AASU adviser Dr Samujjal Bhattacharya said, “The autonomy of AOD is being granted by act of parliament and in no circumstance we will allow the same to be diluted. In 2006, the than petroleum minister, Mani Shankar Aiyar has informed chief minister, Tarun Gogoi in a letter that IOCL have no plans to wind up the marketing operations of AOD. Further, the letter stated the identity of the AOD including Rhino sign would continue as before,” he said.

He claimed Mr Aiyar has stated that there is plan to integrate the marketing operations of AOD and the marketing division of IOCL in the Northeast to avoid the duplication of activities. “Assam government was given enough hints however the government did not act on it,” he alleged.

IOC in a statement recently stated that it is done to enhance operational synergy, bring down costs and emerge as the least cost supplier for the benefit of millions of its customers so as to maintain its leadership position. “The integration will in no way affect AOD’s status and the treasured ‘Rhino’ will continue to retain its proud place both in thought and deeds,” it stated.

The IOC statement further said that it was way back in October 1981 that the erstwhile Assam Oil Company was merged with Indian Oil and a separate division by the name of AOD was formed with its headquarters at Digboi.

Since then, both AOD and IndianOil’s Marketing Division were operating in the North-Eastern States as independent entities with their own networks of petrol/diesel dealers, Indane (LPG) distributors, and other administrative offices. Both the Divisions had independent officers for managing the sales areas and were, in a way, competing with each other.

However, the dismantling of the Administered Pricing Mechanism of the petroleum sector in the year 2002 brought with it competition from new players. In a scenario of increasing competition, spiraling crude oil prices and the resultant under-recoveries suffered on major products, IndianOil took a number of initiatives to optimize costs and rationalize resources. The advent of private players and the setting up of refining and marketing infrastructure by other PSU companies in the North-Eastern States further necessitated integration and rationalization of Indian Oil’s activities in a high-cost sector with tough logistics to remain competitive, the statement said.

IndianOil will now be able to remove duplication of cost and efforts, thereby enabling up gradation of all its petrol/diesel stations (retail outlets) with the objective of providing better and more efficient services to the people of Assam and other States in the North-East.

The statement said that IndianOil has done its best to upgrade and modernise the century-old Digboi Refinery and all other establishments of AOD. This is borne out by the fact that though the capacity of the refinery is only 0.65 million tones per annum, it can be compared with any other modern refinery in India. This could be achieved by continuous investments in up gradation of existing facilities and setting up of new units at the refinery. However, due to non-availability of additional crude oil for the refinery, IndianOil could not further enhance its capacity,” it reasoned.