Diesel imports to go down, savings of $525 mn

But the domestic availability of this motor fuel would be about two million tonnes more owing to enhanced output of refineries. Indian oil corporation (IOC) is the canalising agency for diesel imports, and is estimated to be buying diesel at a weighted average of $105 a tonne FOB (freight on board).

Thus a dip of five million tonnes would help save foreign exchange outgo of about $525 million, sources indicated. Diesel import bill during the current financial year is expected to be around $1.2 billion.

The government had earlier projected a ten per cent growth in diesel consumption and on the basis of this imports were planned to meet thegap in domestic availability.

India had kept a provision of $8.4 billion for crude and petroleum product imports during the current financial year and the dip in diesel imports alone should help India cut down the oil import bill to less than $8 billion

On top of it, India would also benefit by prolonged slump in international oil prices which came down to less than $10 a barrel. At a time when India’s foreign trade deficits are in the range of $6 billion, the savings on petroleum account would help contain the widening foreign trade gap.

Out of India’s oil import bill of about $8 billion during 1997-98, petroleum product imports had accounted for about $three billion including about $two billion for diesel.