IndianOil may import diesel in 2009 to meet demand
New Delhi   02-Sep-2008
Flagship refiner IndianOil is likely to import up to 0.7 million tonne of diesel in the January-March period of 2009 to meet rising domestic demand, even as the government is unlikely to relax the 2010 deadline for introduction of Euro-IV motor fuels. "We do not need to import diesel till December," IndianOil director (finance) S V Narasimhan said on the sidelines of IndianOil Foundation Day function here. Diesel demand has grown by an unprecedented 18% during the first four months of the current fiscal mainly because the fuel is finding use in power generators as it is priced lower than industrial fuels like naphtha and fuel oil. This unprecedented demand growth has seen domestic output fall short of the requirement and 4.14 million tonne of diesel was initially envisaged to be imported in 2008-09. Of this, 1.267 million tonne was imported in April-July Narasimhan said IndianOil imported 0.2 million tonne of diesel so far this year and the company may import 0.5-0.7 million tonne in January-March quarter of 2009. The company had imported 0.7 million tonne of diesel in 2007-08 fiscal. Diesel production by IndianOil, Bharat Petroleum and Hindustan Petroleum in 2008-09 was projected at 39.494 million tonne. Demand, however, has been estimated at 54.788 million tonne. Of this, 11.154 million tonne is to come from standalone refineries leaving 4.14 million tonne to be met through imports. In 2007-08, the demand for diesel grew 14.2% and necessitated imports of 2.354 million tonne. Meanwhile, the government is unlikely to heed the request from state-run refiners for more time to upgrade their facilities for introducing Euro-IV motor fuels. A senior company official said the ministry has committed supply of the high-quality fuel to major cities from April 1, 2010 and was unlikely to change plans. The three firms are facing cash crunch because of losses on sale of petrol, diesel, cooking gas and kerosene and wanted more time to make investments in upgrading their refineries to produce Euro-IV grade petrol and diesel. Production of Euro-IV grade fuel requires setting up of hydro-treater plants and refineries in crowded cities like Mumbai.