Naptha/Fuel Oil import by Independent Power Producers -Guidelines for - DGFT - 57 /(RE PN)/97-02

Naptha/Fuel Oil import by Independent Power Producers -Guidelines for Public Notice No.57 (PN)/97-02 Dated the 5th December, 1997 Subject: Export and Import Policy April, 1997-March, 2002-Policy relating to import of Naphtha. Attention is invited to Ministry of Commerce Notification No.25/97-02 dated 5th December, 1997 according to which import of Naphtha is also permitted by Actual Users as fuel in power sector in accordance with a Public Notice issued in this behalf. 2. In pursuance to the above, import of naphtha/fuel oil shall be permitted by the Independent Power Producers (IPPs) against the import licences issued by the Directorate General of Foreign Trade, Udyog Bhawan, New Delhi subject to the following conditions:- Import of naphtha by IPPs would require a licence to be granted by Directorate General of Foreign Trade (Headquarters), for which application shall be made in the form prescribed in Appendix 8 of the Handbook of Procedures (Volume 1 ), 1997-2002. The import of naphtha/fuel oil by IPPs shall be subject to Actual User conditions and shall be granted by DGFT on the basis of quantity and type of fuel as mentioned in the fuel linkage letter and No Objection Certificate issued by Ministry of Petroleum Natural gas. The period of licence shall be as per provisions of Exim Policy. The decision to extend the period of licence beyond the normal period as provided in the Exim Policy shall be taken by the D.G.F.T. in consultation with Administrative Ministry. IPPs may submit copies of their applications simultaneously to the Ministry of Power, Ministry of Petroleum Natural Gas and the oil company through which linkages have been given to them. The oil company shall send its comments within 10 days to the Ministry of Petroleum Natural Gas and if no comments are received within 10 days on receipt of application from I PP, it will be assumed that oil company has no objection to the proposed imports. Ministry of Petroleum Natural Gas shall also sent its comments within a week on receipt of comments from the oil company to the Ministry of Power and DGFT. Ministry of Power after considering the view/comments of Ministry of Petroleum, Natural Gas shall make their specific recommendations on the IPP application to the DGFT. DGFT will take appropriate decision on the application for import licence to IPP. At the time of actual import, the Customs Authorities at the port of import shall verify and satisfy themselves about the availability of the necessary licence sanctioned by the DGFT, and for the purpose of monitoring the compliance of actual user conditions, they may allow the assessment initially on provisional basis "subject to finalisation on the basis of submission of proof of end-use. For this purpose, the State Electricity Board {SEB) may be designated as the authority to issue the end- use certificate as the Power Purchase Agreement (PPA) would exist between SEBs and IPPs. The import can be done only through the ports declared as 'Oil Port' under Rule-16 of the Petroleum Rules 1976. Disposal of off-spec/unutilised quantity of imports will be allowed to be done only through oil PSUs on terms mutually agreed on commercial basis. While granting the licence for import by IPPs, DGFT may stipulate such other conditions which may be necessary to ensure that actual user conditions being strictly observed by the IPPs. The IPPs may source an import either directly or through consortium of IPPs (incorporated or unincorporated) or through oil PSUs or through joint venture companies in which an Oil Public Sector Undertaking is a partner. The IPPs may tie up for the import with the oil PSUs either under Fuel Management Scheme or through facilitation by the Oil PSUs. The IPPs may opt to utilise the import terminal/storage facilities of their own, oil PSUs or those of JVs in which an Oil PSU is a partner or of any private party, including foreign company or its JV for import of naphtha/fuel oil. 4. This issues in public interest. Sd/- (S.B. Mohapatra) Director General of Foreign Trade --------------------------- Note : 1. Import of Naptha is free. The provisions as stipulated for import of Naptha for use in the power sector vide this Public. Notice stands withdrawn with immediate effect vide Notification No. 27/2003 dated 13/01/2004