Stop subsidised diesel to commercial users, say oil companies

  • 17/06/2008

  • Hindu (New Delhi)

Sujay Mehdudia NEW DELHI: Faced with the constant pressure of rising crude oil prices in the international market that touched $140 a barrel on Monday, Oil Marketing Companies (OMCs) have proposed to the Petroleum Ministry that the supply of subsidised diesel to commercial users, including hospitals, hotels, shopping malls and even major power plants across the country, be stopped. Informed sources said a review of the supply chain of petrol and diesel was carried out by the Petroleum and Natural Gas Ministry along with OMCs recently and the issue came up for discussion. However, a senior Petroleum Ministry official said the OMCs were competent to issue specific orders in this context without having to seek permission from the Ministry. Such commercial groups cannot be treated on a par with the public transport or mass transport sector, the official said. It was felt that all unwanted "subsidised sectors' should be asked to pay the market rate. "There is an urgent need to differentiate between the targeted subsidised groups and those who are taking undue benefit of the subsidy factor,' a senior official said. The government is of the view that all commercial establishments would have to buy the costlier premium diesel or pay the market price to the OMCs for massive consumption. Similarly, even the public sector power generating companies will be asked to pay higher cost for diesel they use to run boilers during the synchronisation of power stations. Leading power generation company NTPC consumes around 50,000 kilolitres of low sulphur high speed diesel per annum. Hospitals across the country too will be asked to buy diesel at higher rates for running their generator sets. So will shopping malls and other such commercial ventures coming up in huge numbers. The consumption of fuel oil in India is growing at 20 to 25 per cent. Most industrial establishments use diesel as it is cheaper than other fuels such as furnace oil and naphtha.