Petrol, diesel shortage looms large
29th September 2008
If you thought petrol and diesel were going to get cheaper thanks to falling crude prices, think again. In fact, thank your lucky stars if there is no shortage in the next 2-3 months.
The three companies supplying these fuels — IndianOil, Hindustan Petroleum Corporation and Bharat Petroleum Corporation — are up to their necks in debt and are not even sure if daily operations will continue beyond November.
This means their refineries could gradually shut down across the country and petrol pumps will have no stocks of diesel or petrol. Households will have to wait for eternity when it comes to their reliable LPG cylinder. Remember, it was not so long ago when there were reports of diesel shortage while fresh cylinder connections had also stopped.
Why is this happening now when prices of petrol and diesel were recently hiked and things seemed better on the global crude price front?
Well, for a start, the hike was not enough. Two, and more importantly, the government has still not compensated the three oil companies for losses incurred on sale of petrol, diesel, cooking gas and kerosene since January this year. This is generally done in the form of oil bonds and the aggregate amount for the nine months ending this September is a staggering Rs65,000 crore.
The combined borrowings of IOC, HPCL and BPCL have already exceeded Rs1lakh crore (it is nearly Rs110,000 crore) and they will have to stop sometime. One good reason is that between them, their borrowing limit is Rs140,000 crore, which translates into one more month of pleading and negotiating with banks for money.
Source: DNA India