1. Policy Guidelines for release of MS, HSD, SKO (Non-PDS), LDO, FO, HPS, LSHS & Bitumen to
Direct Consumers

2. Need for Policy Review Lack of single comprehensive policy.
Need for uniformity on procedures across MD.
Different approach by PSU OMCs.
Existing Policies issued after MOPN&G meeting on
MOP&NG advised various relaxations on release of petroleum products from 2000 to 2002.
No revision of internal policy circulars of 2000 (even after relaxations by MOP&NG).

3. Need for Policy Review
Changing market dynamics need policies befitting the ground realities.
Need for uniformity, standardization and clarity on policies, procedures and practices in the field.

4. What has changed ?
Following has changed after issuance of Policy Circulars no. DS/CP dtd , DS/Policy dtd These policies have following stipulations :
Ban on inter-state road supplies of HSD, Black Oils. (Exceptions for HSD allowed to EOU, agreement, Govt./ PSU customers).
Inter-state supplies by road (to avail concessional sales tax) to be cleared by Committee of ED (Sales), ED of Region, GM I/C (F), GM (IA), HO.
Discounts/incentives on HSD, Black Oils and Bitumen not allowed.

5. What has changed ?
No intermediaries allowed for promoting sale of any product.
Only cash & carry supplies for HSD /Black Oils.
HSD supplies to fisheries on the basis of allocation by State Govts.
Quarterly confirmation from Sales Tax Deptt. on validity of CST Certificate.
HSD supplies to processors are allowed.
HSD supplies to power houses as per recommendations of administrative Ministry and approval of MOP&NG.
HSD supplies for captive power generation after plant assessment.

6. Important MOP &NG documents referred in Policy
Document reference
Particulars
MOP&NG letters no.
P-45011/24/2000 dtd
Record notes of discussion of meeting of Oil Industry with Secretary, PNG.
No inter-state supplies to direct consumers. Billing on delivered rate built-up from nearest supply storage point within state.
No discount on bitumen supplies and no intermediaries for bitumen.
No commission, discount facilitation charges to transporters or any person for promoting sale of controlled products.
P-45011/24/2000-Dist dtd
Restriction on inter-state road supplies on bitumen removed.
P-45011/24/2000-Dist dtd
Govt. allowing supply of petroleum products to specified categories of customers including EOU, customers in union territories, Govt. and PSU customers.
Inter-state supplies of FO, LDO, HPC where storage facilities is not available in respective states.
MOU agreement customers.
Naphtha supplies for power generation.
HSD to textile mills in TN covered under orders of MRTP.

7. Important MOPNG documents referred in Policy
Document reference
Particulars
P-45011/24/2000-Dist (Pt)
dtd
Relaxations advised on,
FO, HPS,LDO,RFO, LSHS and bitumen on inter-state basis.
HSD on inter-state basis to bulk customers for own consumptions like generation of power, etc. on ‘C’ form.
No HSD supply for non-existing customers.
Naphtha on inter-state basis to fertilizers, petrochemicals and power plants.
Above relaxations are subject to ensuring (a) Physical existence of customer and operation of unit to its capacity (b) Verification of customer’s existence (c ) Verification of original sales tax, explosives cert. (d) Certificate from customer on usage of product drawn on concessional tax.
Extension of credit on interest rate not less than bank rate.

8. Important MOPNG documents referred in Policy
Document reference
Particulars
P-19022/10/2002-Dist, dtd
Sanction of Consumer Pumps – Abrogation of MOP&NG’s letter nos. P-21017/12/92-Dist. dtd and on sanction of consumer pumps. Stipulation on no retail sale to outsiders/general public and no CP conversion to regular ROs.
P-38022/16/2000-Dist, dtd
Supply of HSD to Power Projects – Release of HSD to consumers including power projects as per their requirement of MOP&NG approval not required.
P-45011/24/2000-Dist, dtd
Withdrawal of Ministry’s letters dtd and in view of the deregulated environment in petroleum sector. Oil companies to ensure compliance of statutory guidelines in vogue in States for marketing of petroleum products.
P-45011/24/2000-Dist (Pt) dtd
Relaxation for supply of deregulated products/HSD – Withdrawing Ministry’s letter dtd in view of deregulated environment in petroleum sector. Oil companies to decide on credit extension and compliance of statutory guidelines in vogue in States for marketing of petroleum products.
P-21013/1/2003-Dist dtd
Allowing PSU Oil Companies to supply surplus indigenous SKO to genuine industrial customers.

9. Guidelines on MS and HSD
Proposed guidelines
Existing guidelines-2000
Product usage mentioned
To be released to direct consumers for own use and also for vehicles,machineries engaged for their work.
Direct consumers not to resell.
Physical existence of customer’s plant/site.
Actions to be taken for release of products
for new customers.
Verification of documents i) Regn. Certificate, ii) Storage Licence (if reqd) iii) ST/VAT Regn. Certificate, iv) Any other statutory/mandatory licence applicable in the state.
Visit to plant/site while making supplies for first time.
Report to Divisional Office.
Guidelines do not cover MS supplies.
Product usage was not defined.
Not specified
Not specified.
Provided in existing guidelines.
Actions to be taken for release
of products.
Verification of documents i) Industry
Certificate, ii) Storage Licence (if reqd) iii) ST/VAT/CST Regn. Certificate, iv) Central Excise Regn.no.,v)NOC from State Electricity Board (for captive power generation).
Visits as per applicable norms for A,B C category customer.

10. Guidelines on MS and HSD
Proposed guidelines
Existing guidelines–2000
Modes of deliveries.
Delivered and ex MI supplies defined.
All MS supplies by road to be on delivered basis (Defence exempted).
Normally, HSD supplies by road on delivered basis.
Inter-state road supplies on delivered/delivery assistance basis.
Not specified.
All supplies to be on delivered basis.
Inter-state supplies by road banned for general trade category, processors and fisheries.
Inter-state supplies for EOU allowed on verification of genuineness/ documents, etc.
Inter-state supplies permitted for MOU/agreement customers, Govt. / PSU customers.

11. Guidelines on MS and HSD
Proposed guidelines
Existing guidelines
Delivery Modes.
Rail supplies to be considered as ex MI supplies (provisions of ‘Said to Contain RR’ to apply).
Ex MI supplies of HSD within State with full duties and taxes to be allowed on approval from State Head.
EX MI supplies within State and on inter-state with concessional duties/taxes not allowed.
No approval required for ex MI supplies to Defence, Railways and Paramilitary forces.
Not specified.
Supplies to Rly, Defence,
DGS&D,etc., ONGC/OIL as
per existing agreements.
Not mentioned.
Supplies to Rly, Defence,
DGS&D, etc., ONGC/OIL as

12. Guidelines on MS and HSD
Proposed guidelines
Existing guidelines-2000
Delivery assistance concept redefined.
HSD supplies to fisheries, power plants, and DG sets specifically defined.
No HSD supplies to processors.
Commercial terms of discount/credit to be guided by separate policies.
Not specified
Inter-state supplies by road to fisheries
not allowed.
Supplies to power houses as per
recommendation of SEB / Ministry of
Power and approval of MOP&NG.
Supplies for captive power generation on
quantity assessment by IOC.
Supplies to processors allowed with
specific provisions.
No discount and credit allowed as general
rule.

13. Guidelines on MS and HSD
Proposed guidelines
Existing guidelines
HSD Supplies as Bunker Fuels
Different customer categories specifically given for release of LS/HF HSD.
Normally, coastal run vessels to be released duty paid products.
Foreign run vessels and research vessels-bonded supplies.
Foreign run vessels can be released duty paid products, if required.
Bunker fuels on ex-MI basis to be continued as per practice.
Not specified separately
Not specified.

14. Guidelines on SKO (Non PDS)
Proposed guidelines
Existing guidelines
Existing policies of Dec 2003 on release to direct consumers modified.
Product usage defined.
Supplies, both from indigenously produced and imported SKO to be released for genuine use.
Provisions for document verification, assessment of SKO rqmt. of plant by team of officers and report to DO.
Supplies to be made in full tank truck load only.
There was no specific mention on SKO releases to direct consumers in the 2000 guidelines.
Not specified.
However, guidelines were issued in December, 2003 after MOP&NG allowed release of indigenously produced SKO to direct consumers for genuine use.
Available in existing guidelines.

15. Guidelines on SKO (Non PDS)
Proposed guidelines
Existing guidelines
Part load facility to Defence/Paramilitary on case-to-case basis as extreme measure.
SKO to be released only at non-PDS rates to all customers.
Only colourless SKO to direct consumers. Exception made for Army, Navy, Air Force, Paramilitary Forces and Railways.
SKO supplies normally on ex MI basis (exceptions allowed).
Delivered supplies can be made to Defence, Paramilitary, Railways and other contractual customers.
Not specified.
Available in existing guidelines.

16. Guidelines on SKO (Non PDS)
Proposed guidelines
Existing guidelines
End-use certificate from industrial customers to be furnished to State Civil Supply Authorities.
SKO to processors based on approval from HOD CS Deptt., HO.
Separate guidelines applicable for SKO release to Parallel Marketeers.
Available in existing guidelines.
Not specified.

17. Guidelines on FO, LDO, HPS, AND LSHS
Proposed guidelines
Previous guidelines-2000
Product usage defined.
Documentation specified.
New Customers-Physical existence of plant and visit to same by field officer.
Separate guidelines for resellers promoters / BDAs.
Commercial terms of discount/credit to be decided separately.
Uniform guidelines on interstate supplies applicable for all customers.
Product usage was not defined.
Documents as applicable for HSD.
Provided in existing guidelines.
No resellers or any intermediary allowed. LDO sales thru SKO/LDO dealers to continue.
No discount/credit allowed on any black oils.
Separate guidelines on interstate supplies for different customers eg. General trade,EOU,MOU/Agreement /Govt and PSUs.

18. Guidelines on Bitumen and Bituminous Products
Proposed guidelines
Existing guidelines-2000
Product can be released to customers/ contractors based on work orders by Govt authorities.
For small volume customers, release can be made as per requirement – minimum one truck load.
Documentation specified for processors.
Physical verification of plant.
Separate guidelines for product promoters.
Commercial terms of discount/credit to be decided separately.
Not mentioned.
Documentation specified for industrial customers/emulsion manufacturers only.
Also available in previous policy.
No resellers or any intermediary allowed.
No discount/credit allowed on any bitumen sale.

19. Delivery Modes for Black Oils and Bitumen
Proposed guidelines
Existing guidelines-2000
Normally, all road supplies to be made on ex MI basis.
Delivered / delivery assistance for black oils in exceptional cases based on specific approval from SO Head.
No delivered supplies for bitumen (Exceptions – UPSO).
Bunker fuel supplies of FO and LDO are on delivered basis. No separate approval reqd. for these supplies.
Not stated specifically.

20. Delivery Modes for Black Oils and Bitumen
Proposed guidelines
Existing guidelines-2000
Inter-state supplies are allowed.
For General Trade category customers, inter-state supplies of black oil by road banned. However, releases on inter-state road basis permitted where storage facilities are not available.
Inter-state supplies by road allowed to Govt. parties, Railways, Steel, Defence, Power Plants, STUs and PSUs.
Supplies to MOU/agreement customers as per contract terms.
Supplies to EOUs by road on verification of geniuses/documents/ green book, etc.
Bitumen inter-state supplies banned to all customers except supplies to NHAI, CPWD/PWD and other Govt. bodies/their contractors.

21. Safeguards applicable for all products
Proposed guidelines
Existing guidelines-2000
Monitoring of consumption pattern for supplies made on concessional duties and taxes.
For supplies on concessional duties and taxes,contracts to be entered with customers either through letter, MOU, agreement or PO/SO/RC.
Inter-state supplies on concessional duties & taxes should be made in pursuance of above contract. (Not applicable for Defence/Ordnance factories/BRO/ DGS&D and Govt. PSU category customers drawing supplies against specific contracts).
Not stated specifically.
Not mentioned in the guidelines.
(There are certain guidelines on
release of Delivery Orders, Supplies
issued vide Sales/01600/Genl dated
which does not have any
specific safeguards which
need modification).

22. Safeguards applicable for all products
Proposed guidelines
Existing guidelines-2000
Confirmation of product receipt is essential.
Random verification of product usage when drawn on concessional taxes & duties.
To obtain following for sales based on concessional sales tax :
Declaration from the unit about qty received,consumed,balance in stock and end use of product.
Confirmation from ST dept.on quarterly basis that CST regn is valid.
Receipted copy of monthly out turn filed by customers with ST dept. on qty. received against declaration in ‘C’ Form.
Not stated specifically.

23. Safeguards applicable for all products
Proposed guidelines
Existing guidelines-2000
Supply location to secure receipt of product before despatch on ex MI interstate basis.
All ex MI supplies on concessional tax & duties to be made based on lorry receipt.
Not stated specifically.
Not stated specifically.