Rail

Railways have all along been an important means of transportation for POL products. This has been so, as rail movements are comparatively cost-effective vis-a-vis road movements. However, the limiting factor has been the availability of tank-wagons. Notwithstanding this fact, more than 40% of the POL movement are made through railways and in the years to come it will constitute to contribute as an important mode of transport for POL products.

The details of estimated tank-wagon loading in the last 7 years is as given in table.

The share of rail in the total traffic would however fall in the years to come, due to withdrawal of budgetary support. To overcome the shortages of tank-wagons, especially for transportation of LPG, oil companies have been financing railways under "Own your tank-wagon scheme". Railways offer a rebate in freight with respect to products moved through tank-wagons owned by oil companies. Since the depreciation on tank-wagons is compensated under APM, oil companies surrender the rebate so received to OCC.

Pipelines

At present, about 80% of the total pipeline capacity is owned by IOC and and the balance capacity is held by HPCL. Apart from the Kandla - Bhatinda pipeline, put up by the IOC, and yet to be fully commissioned, the other pipeline projects under construction are

• Mumbai - Manmad pipeline, by BPC, covering 270 km with an initial capacity of 3.30 mmtpa.
• Vizag - Vijayawada pipeline, by HPC, covering 380 km with an initial capacity of 4.00mmtpa expected to be commissioned by mid - 1999.

The Ministry of Petroleum & Natural Gas has acknowledged the importance of creation of a pipeline grid and recently approved the setting up of an apex holding company which will co-promote specific pipeline JVCs to implement discrete sections of the grid. The holding company will be a non-government company in which IOC, BPC and HPC will hold 16% each and IBP will hold 2%. The balance 50% will be offered to private sector oil companies and financial institutions. The holding company shall subscribe to 26% of equity in each of the JVCs, 48% shall be offered to the public and the remaining 26% shall be subscribed by oil PSUs, financial institutions and private sector oil companies.

Currently, limited product movements take place between port locations. Oil companies at the direction of OCC have taken on charter hire 27 tankers from shipping companies with an aggregate DWT of 0.638mn. The difference between the cost of transportation as#included in the price vis-a-vis the actual cost is adjusted in the Pool a/c. In addition, direct importation of products are also handled at port locations. The total traffic estimated in 1995-96 was 5.50 mmt. The importance of this mode of movement will diminish with the installation up of more refineries in port locations.

The estimated balance traffic, of 22.20 mmt of products, was moved through road in 1995-96, constituting nearly 30% of the total movement. Unless urgent measures are taken to improve the pipeline and rail infrastructure, road will continue to be one of the key modes of transport.

Installations, depots and tankages

Installations are large storage points attached to refineries or to a port and serve as supply sources to small locations in the region. Depots are very small storage & distribution centers that generally cater to the needs of a city or town. At present oil companies have installations in almost all major cities and port locations and depots at all district headquarters.

The total tankage capacity of the industry at the middle of 1995 stood at 10.75 mmt, representing a capacity of about 1.72-month's sale. The company-wise tankage infrastructure is given below.