'IOCL incurs overall addl cost of Rs 516cr due to deviation of optimised logistics plan'

A CAG Audit observed that Indian Oil Corporation Limited (IOCL) incurred an overall additional cost of Rs 516.30 crore due to deviation of optimised logistics plan in case of transportation of MS/ HSD during the period 2014-15 to 2018-19 and Rs 132.55 crore in case of LPG during the period 2015-16 to 2018-19.

The report said that Bharat Petroleum Corporation Limited reported lower expenditure compared to planned expenditure by Rs 43.69 crore due to variations from optimised logistics plan in transportation of MS/ HSD during the period 2014-15 to 2018-19. Hindustan Petroleum Corporation Limited incurred an additional cost of Rs 200.21 crore in movement of MS/ HSD during the period 2014-15 to 2018-19 and Rs 73 crore on LPG during the period of 2017-18 and 2018-19.

Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited yet to implement suitable technology in its refineries as recommended by the Consultant appointed by Petroleum Planning and Analysis Cell (PPAC) to improve LPG yield and to reduce imports of LPG, said the CAG report.

CAG's Performance Audit Report on Supply, Logistics Operations of MS, HSD and LPG in Oil Marketing Companies was presented in Parliament on Friday.

The public sector Oil Marketing Companies predominantly (about 91 per cent) cater to the requirement of Motor Spirit (MS), High Speed Diesel (HSD) and Liquefied Petroleum Gas (LPG) of the country.

The report examined the effectiveness of Petroleum Logistics of MS, HSD and LPG in Oil Marketing Companies under various aspect of the system during the period from 2014-15 to 2018-19.

The report said that insufficient port capacity resulted in vessels waiting for berthing. In case of voyage charter vessels, Oil Marketing Companies incurred Rs 2,227.20 crore toward demurrages.

Audit reviewed 137 instances of demurrage payments and observed that only 37 per cent of the total cases reviewed were due to non-controllable reasons such as delay in berthing of vessel (51 instances) and remaining 63 per cent were due to non-availability of storage space, shut downs, etc., which were controllable.

The CAG audit report said that as per road transport agreement between Oil Marketing Companies and transporters, provision of vehicle tracking systems in trucks is mandatory.

However, installation of the system is yet to be completed by Oil Marketing Companies resulting in non-monitoring of trucks carrying hazardous petroleum products.