The government of India, under the PDS Kerosene and Domestic LPG Subsidy Scheme, has categorised ports at Kandla, Mumbai, JNPT, Jamnagar, Hazira, Mangalore, Kochi, Chennai, Haldia and Vizag as ‘Designated Ports’ where ocean freight subsidy can be availed by oil companies. Thus, India’s busiest ports on the west coast at Kandla in Gujarat and Mumbai are getting further congested with LPG import vessels as the state-owned oil companies refuse to go beyond a these designated ports that have been nominated by the government to give freight subsidies for bringing in the cooking fuel from overseas, sources said.
This means that state-owned oil marketing companies get reimbursed for freight for any cooking gas LPG imports done by these ports.
This subsidy is not available for imports done at other ports and so there is a clamour to get the ships only at these ports, four industry sources with direct knowledge of the matter said.
This has led to the piling up of LPG vessels at these handfuls of ports and a higher turnaround time.
The sources said this facility of claiming reimbursement of the freight is not available on LPG imported in the same vessel at other ports such as Mundra, Dahej, Pipavav, Porbandar, Tuticorin or Paradip.
To avoid incurring the higher cost of import, OMCs are importing unusually high numbers at such designated ports at the cost of efficient operations, thereby increasing the overall cost of LPG import, they added. The oil industry and the petroleum ministry have made a case for expanding the list of designated ports, but the finance ministry shot down the proposal.
