IndianOil to outsource operational services at LPG plants, oil depots

To cut costs and restrict losses, IndianOil Corporation Limited (IOCL) plans to outsource operational services of its liquefied petroleum gas (LPG) bottling plants, lube blending plants and oil depots and terminals.

"To control costs, we may look at outsourcing operations and maintenance services at our bottling plants and terminals. We have begun focusing on improving our bottom line," said a senior official at IOCL.

"We have taken a view of this and spoken to our worker unions. The measure will also help in stopping unethical practices. They (unions) are supportive of our decision."

IOCL, India's largest refiner, has 89 bottling plants in the country extending from Leh to Andaman and Nicobar islands. The company hopes to save about Rs 1,400 a tonne by outsourcing operations at its LPG bottling plants. Currently, its cost per tonne comes to Rs 2,000. Outsourcing will bring down the cost to Rs 600 per tonne.

"IOCL markets 7 million tonnes of LPG in a year and outsourcing would result in savings of around Rs 1,000 crore," the official added.

IOC's LPG brand, Indane, is available in compact 5-kg cylinders for rural, hilly and inaccessible areas, 14.2-kg cylinders for domestic use, and 19-kg and 47.5-kg for commercial and industrial use.

In a bottling plant, bulk LPG is received through pipelines, by road or by rail. This is then stored in the vessels and filled in cylinders using filling machines. These cylinders are then sealed and sent to distributors.

The company has 135 oil depots and terminals for storing oil and petroleum products.

Products from these facilities are transported for end use or for further storage. An oil depot has tankage either above ground or underground, and gantries for the discharge of products into road tankers or other vehicles (such as barges) or pipelines.

IOCL, the largest of the three oil marketing companies, saw its net profit for the July-September quarter drop by 82 per cent at Rs 1,684 crore from Rs 9,611 crore in the year-ago period.