HPCL saves Rs 95cr due to pipeline operations

The Visakha-Vijayawada-Secunderabad pipeline operations have saved Hindustan Petroleum Corporation Limited (HPCL) an amount of about Rs 95 crore this fiscal by way of lower petroleum products transportation cost and reduction of transport losses.

HPCL had laid the 573-km long underground cross-country pipeline, with an investment of about Rs 800 crore, to evacuate Visakha Refinery products. The pipeline came into operation in March 2002.

"During the current year, we have transported 30.8 lakh tonnes of petroleum products through this pipeline as against 30.2 lakh tonnes in the last fiscal. Ten per cent of the products was transported up to Rajahmundry, 60 per cent up to Vijayawada, five per cent up to Suryapet and 25 per cent up to Secunderabad. Out of the 30.8 lakh tonnes of petroleum products, 70 per cent was diesel, 16 per cent was petrol and 14 per cent was kerosene," M V R Krishna Swamy, chief manager, Visakha-Vijayawada-Secunderabad pipeline operations, told Business Standard.

"Transporting the products via the pipeline is 30 per cent cheaper than rail transport. Also, the company loses about 0.5 per cent of the product via rail transport whereas via pipeline there is no loss of product," Swamy said.

The total transportation capacity of the pipeline is 40 lakh tonnes per year. "Next fiscal, HPCL has targeted to transport 31.5 lakh tonnes, and by 2007-08 we plan to utilise full capacity," he added.

"As per the present railway freights, HPCL should have paid about Rs 210 crore on transportation of 30.8 lakh tonnes of petroleum products to Rajahmundry, Vijayawada and Secunderabad, but this expenditure has come down by 30 per cent because of the pipeline transportation," said HPCL sources.

Meanwhile, HPCL moves around 16 lakh tonnes of petroleum products every year to Orissa and Chhattisgarh via rail for which the company pays between Rs 1.40 to Rs 1.60 per tonne per km transport, depending on the product and place, HPCL sources said.

"As per the present railway freights, HPCL should have paid about Rs 210 crore on transportation of 30.8 lakh tonnes of petroleum products to Rajahmundry, Vijayawada and Secunderabad, but this expenditure has come down by 30 per cent because of the pipeline transportation. In addition to this, the company has been getting product savings of 0.5 per cent by avoiding transportation loses," sources added.