New Delhi: The Indian government on Monday denied considering a proposal that would have limited the sale of fuel from petrol pumps at night.
“We have already made it very clear it is not our idea. It is an idea which is coming from public and others,” oil minister M. Veerappa Moily told reporters. “No decision will be taken to keep petrol pumps dry in any part of the country.”
The Indian Express newspaper on Sunday reported about the ministry’s austerity measures and its plan of restricting the timings and cited Moily as saying, “It could be 8am-8pm or something like that. We are still working on it. It may not be implemented on the highways though. We have to try out these things.”
The ministry of petroleum and natural gas on Monday issued a statement denying such a proposal.
India’s efforts at energy security have yielded mixed results against the backdrop of faltering domestic production. India imported 184.79 million tonnes of crude oil in the year ended March for $144.293 billion.
The proposal to shut down petrol pumps by 8pm has been rejected by finance minister P. Chidambaram. Such a step will not be effective in curbing fuel consumption, according to the finance ministry. “This may encourage black marketing of petrol and diesel at night,” a finance ministry official said.
Since many petroleum products are subsidized, the losses suffered by state-owned oil marketers due to selling fuel below cost is expected to reach Rs.1.8 trillion in the current financial year compared with Rs.1.61 trillion in the preceding year. The current method calculates these losses as the difference of the import and export prices of petroleum products in an 80:20 ratio, as India imports 80% of its requirements.
India’s oil bill has ballooned because the rupee’s value has declined significantly against the dollar in recent months. On Monday, it was worth 66.02 to a dollar, compared with Rs.54.45 in 2012-13. Each fall of Rs.1 against the dollar results in an additional burden of Rs.9,000 crore on oil marketers.
As part of a strategy to contain the massive foreign exchange outflow, Moily has formed a six-pronged strategy. This includes state-owned refineries such as Indian Oil Corp. Ltd restricting imports to 103.663 million tonnes (mt), a fuel conservation campaign, reduction in domestic cooking gas demand, boosting an ethanol-blending programme and increasing crude imports from Iran.
These would result in savings of around $20 billion, according to Moily’s communication dated 30 August to Prime Minister Manmohan Singh and finance minister P. Chidambaram. In addition, external commercial borrowings by the oil firms will result in an inflow of $3.75 billion.
However, some of these measures, such as increasing oil imports from Iran, seem a tall order in the backdrop of Western sanctions on Iran over its nuclear programme.
Any company that does business with Iran faces these sanctions. Iran maintains it is developing nuclear energy for peaceful purposes and not to make bombs.
India is the world’s fourth largest oil importer and a major customer of Iran’s 1.7 million barrels per day of oil exports.
Moily, at the time of assuming charge in October, had said he would try to lower import dependence on fuel and work towards bridging the difference between the world’s per capita crude consumption and that of India. According to him, India will become energy independent by 2030.
Curbs imposed by the West on Iran for its suspected nuclear weapons programme have affected crude oil sales by the country.
In April-December 2012, India imported 9.69 mt of crude oil from Iran valued at Rs.24,814 crore. After the sanctions, Iran dropped to seventh position as a supplier of crude oil to India for the April-December 2012 period from the second spot in 2009-10.
While the upstream companies such as Oil and Natural Gas Corp. Ltd, Oil India Ltd and GAIL (India) Ltd may contribute Rs.70,500 crore, Moily in his communication wrote, “The remaining under-recovery of Rs.97,500 crore can be met from either the budgetary support from the government or appropriate increase in the price of diesel, PDS (public distribution system) kerosene and domestic LPG (liquified petroleum gas).”
Asit Ranjan Mishra, Liz Mathew and PTI contributed to this story.