IOC bids for fuel marketing and retail rights in Myanmar

State-run Indian Oil Corp (IOC) has bid for rights to import, store and distribute petroleum products in Myanmar.

“We have put in a bid to enter fuel marketing and retail business in Myanmar,” a senior company official said.

Myanma Petroleum Products Enterprise (MPPE) last year invited companies to form a joint venture for import, storage, distribution and sale of all petroleum products except liquefied petroleum gas (LPG) and liquefied natural gas (LNG).

A separate tender for cooking gas LPG was floated. IOC had bid for that tender too, the official said.

MPPE left the fuel distribution business when it was privatised in 2010, but is planning a re-entry into the fast-growing business sector that is marred by widespread dissatisfaction over service standards and fuel quality.

In 2010, MPPE transferred 216 filling stations to private companies across the country but it still runs 12 pumps which supply fuel to state-owned vehicles.

It also owns four main fuel terminals and 24 sub-fuel terminals. Around 70 private companies run the country’s 1163 petrol stations, but few have storage facilities or an import licence.

MPPE now wants to tie up with foreign companies to expand the business and rehabilitate existing facilities. MPPE will hold 51 per cent of equity while the foreign company will hold the rest.

The joint venture will be for a maximum of 30 years, extendable two 10-year periods.

The official said IOC wants to use its just commissioned Paradip refinery in Odisha to ship fuel a short distance across the Bay of Bengal to get to Myanmar.

Being the country’s largest fuel retailer, it also has experience of setting up fuel stations and managing logistics, which would be helpful in the nascent market.

IOC is among the 11 to have bid for the separate tender to build a new liquefied petroleum gas (LPG) terminal and supply chain business for the distribution and marketing of the cooking and heating fuel.

Winner of this tender will have to upgrade eight storage containers each with a capacity of 5550 metric tonnes of LPG for Ministry of Energy-owned No 1 Refinery (Thanlyin), and build a wharf with the capacity to load and unload 2000 metric tonnes of LPG.

This is the first time foreign companies will be allowed to distribute LPG in Myanmar.

Besides IOC, Singaporean firms Puma Energy Group and BB Energy (Asia) and a consortium of Japan’s Marubeni Corporation and Tokai Holdings has also bid.