April 17 (Bloomberg) -- Reliance Industries Ltd., India's most valuable company, surrendered the export-oriented unit status of its refinery to sell fuels locally.
The change, effective yesterday, will enable the refiner to cater to both the local and overseas markets efficiently, Reliance said in an e-mailed statement today.
Reliance is creating the world's biggest refining complex at a single location by buying unit Reliance Petroleum Ltd., which started a 580,000 barrel-a-day refinery in December. The refinery started operating at a time of excess industry capacity and declining earnings from processing oil because of a slump in global demand for gasoline and diesel.
The new plant is adjacent to a 660,000 barrel-a-day refinery at Jamnagar in the western state of Gujarat.
Reliance shares declined 1 percent to 1,716.95 rupees in Mumbai trading. The stock has gained 39 percent so far this year compared with a 14 percent increase in the benchmark Sensitive Index of the Bombay Stock Exchange.
A number of new refineries, such as Reliance's Jamnagar installation in India, have increased global capacity, depressing margins as demand declines because of the global recession, Bernstein analysts including Neil McMahon said in a report today.
Reliance may sell fuel at its 1,433 stations across India. The outlets were mothballed after Reliance was unable to sell gasoline and diesel at prices offered by government-owned refiners, which sold fuels at controlled prices as crude oil soared to a record last year.
Crude oil for May delivery rose 81 cents, or 1.6 percent, to $50.79 a barrel at 10:07 a.m. on the New York Mercantile Exchange. Prices are up 14 percent this year.
To contact the reporter on this story: M.C. Govardhana Rangan in Mumbai at grangan@bloomberg.net
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