IndianOil may import 1mt of diesel
Mumbai   31-Jul-2008
<b>Current inventory can last till September</b> IndianOil may have to import up to one million tonne of diesel after September this year through March 2009 to meet the rising demand for the fuel, company chairman Sarthak Behuria said Wednesday. "Demand for diesel is growing at 18-20 % this year. Earlier, we had a stable demand growth of about 10-12%. The incremental demand is supposed to be coming from the power sector to run generators in view of increasing power shortages, as diesel is a cheaper fuel," Behuria said. "We do not need to import diesel for the next 2-3 months, as we can cater to a demand growth of up to 15% for the next three months with our inventory" Behuria said. The state-run oil marketer has imported 2,00,000 million tonne of diesel so far this fiscal. IndianOil had imported 0.67 million tonne of diesel in the previous fiscal year. The country's oil marketing industry may need to import two million tonne of the fuel September onwards, Behuria said. Higher diesel sales affect the company adversely as it has to sell the fuel below cost due to the government mandate, resulting in losses, depleting cash reserves and increasing borrowings. "Our current borrowings are at Rs 42,500 crore, and are rising at Rs 7,500 crore per month," Behuria said, adding, "Our borrowings may go up to Rs 58,000 crore by September if crude prices stay at these levels." He, however, expected crude oil prices to fall by about $10 per barrel in the near term. The depleting cash was a worry for the company Behuria said, as "We must have cash and funds to run the company; showing profits is not enough." IndianOil imported 12.9 million metric tonne of crude in the fiscal three months to June 30 at S10.9 billion against 11.9 million metric tonne crude imported at S5.6 billion in the same period previous year