IOCL

Oil firms to raise diesel imports
July 31, 2008, 0:00 IST
IOCL, BPCL, HPCL may buy 3.5 mt from
Indian Oil abroad to meet demand

Indian Oil Corporaton (IOCL), the nation’s biggest refiner, and its state-run counterparts may import 3.5 million tonnes of diesel in the year ending March 2009 to meet demand for the fuel.

IOCL, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) imported 2.93 million tonnes of diesel in the last financial year, making good the shortfall in supply created by increased exports from Reliance Industries’ Jamnagar refinery in Gujarat.

IOCL will increase diesel imports to 1.2 million tonnes in the financial year to March 2009 from 670,000 tonnes last year, Serangulam V Narasimhan, director (finance), IOCL, told reporters in New Delhi today.

The refiner has imported 200,000 tonnes of the fuel so far this year, Narasimhan said. The company does not plan to import diesel in the next two to three months as demand usually lows during the monsoon, he said.

Demand for diesel is growing at the rate of around 25 per cent, while the Indian refiners have capacities to meet the growth in demand up to 15 per cent. The higher demand and production capacity constraints necessitate increased imports.

Reliance exports almost all of the 11 million tonnes of diesel it produces from its refinery after it was given the status of an export-oriented unit early last year.

“At the worst of times, the diesel demand growth has been 8-10 per cent,” said IOCL Chairman and Managing Director Sarthak Behuria. He added that demand for the fuel increases as it is used to generate electricity from generator sets during power failures.

He added that the demand growth has been high in states like Karnataka, where the power crisis has been severe.

Oil marketing companies sell diesel to industrial users as well as retail consumers at the same subsidised prices. “This has created the jump in demand,” Behuria said.

Diesel is the largest-selling fuel in the country. The country consumed 47.64 million tonnes of the fuel in 2007-08. Consumption is expected to be higher by around 20 per cent this year.