The Hindu Business Line : IOC to restrict auto fuel supplies to contain losses

New Delhi, May 28 The spectre of oil scarcity in the country is already becoming a reality. The country’s largest oil company, the Indian Oil Corporation Ltd (IOC), today said that it would ration supplies in order to cut revenue losses.

The IOC Chairman, Mr Sarthak Behuria, told reporters at a conference to announce its annual results here that “we have decided to restrict supplies of auto fuels to whatever is domestically available. In fact, we are already doing it.”

Currently, the company is losing Rs 16.34 per litre on sale of petrol, Rs 23.49 on diesel, Rs 28.72 on kerosene and Rs 305.9 per cylinder of domestic LPG. On the whole, the losses mount up to more than Rs 300 crore per day on the sale of these four products at Government-determined prices.

Mr Behuria said that in order to meet the 20-22 per cent growth in diesel demand, the company would need to import two million tonnes of diesel. But, because of acute cash crunch, the company would prefer restricting supplies to importing at record high global oil prices, he said. IOC has already stopped import of diesel because of mounting losses, and the company has cash available only till September to fund imports, he added.

“We are ready to meet a demand growth of 10-15 per cent. The demand is rising, also because diesel is being diverted as it is cheaper than industrial fuels such as naphtha,” he said, adding that the company would like to meet the full demand of the transport sector.

The Chairman said that IOC would also go slow on giving out new domestic cooking gas (LPG) connections.

“We buy 35-40 lakh cylinders a year. But because of the present situation we will be buying fewer cylinders this year. It is not that we do not have LPG, but there will still be shortages in cylinders,” he said.

Mr Behuria warned that “till now the market is not feeling the pinch. But if the Government does not act, we might see queues and shortages.”