New Delhi: The Indian Railways (IR) will soon be reaching an understanding with Indian Oil Corporation (IOC) for refining crude oil imported by the transport behemoth itself — it is likely to save Rs 2,000 crore (approx US$ 311.33 Million) – 2,500 crore (approx US$ 389.17 Million) a year on taxes for the ailing transporter. The railways consumes about 2.8 billion litres of diesel in a year, costing Rs 18,000 crore (approx US$ 2801.99 Million), and 17.5 billion units of electricity, costing Rs 12,300 crore (approx US$ 1914.69 Million).
- Ravindra Gupta, chief administrative officer, Indian Railways Organization for Alternate Fuel (IROAF) said,“As an initial step, we have invited bids from consultants to work on the plan. We have received three bids. We are planning to import 500,000 tonnes of crude oil directly and will give it to IOC for refining. Our savings will be on account of taxes.”
- The 3 players that have submitted bids are PricewaterhouseCoppers, KPMG & Sahi Tejarat, an overseas agency.
- Once the railways increases crude procurement, oil marketing companies are likely to loose a bulk customer.
- Gupta added, it is the aim of Petroleum Minister Dharmendra Pradhan & Railway Minister Suresh Prabhu to transform the railways into a contract manufacturer, and a series of meetings have already been held in this regard.
- He added,“We have zeroed in on IOC’s Vadodara unit to refine the imported crude.”
- As part of its strategy to move towards cleaner fuel, the railways has already installed rooftop solar panels in guard vans of 6 freight trains and is set to float tenders to get 200 such solar-powered guard vans.