Diesel shortage looms large in India

Faced with huge liquidity problems, India may be forced to cut down on its diesel imports, and thus may no longer meet increasing demand. Each stakeholder, the government, upstream companies and oil marketing companies, is estimated to be faced with almost Rs60,000 crore (US$14.1 billion) each if the under-recoveries continue at the same level. The companies, which are incurring cash losses of Rs4,000 crore (US$940 million) a month, have recently appealed to the government urging immediate action on the price front. Industry analysts say the subsidies being provided by the government, almost Rs22 (US$0.52) per liter, are being diverted to customers who can afford to pay market prices. (May 9, 2008)
Faced with huge liquidity problems, India may be forced to cut down on its diesel imports, and thus may no longer meet increasing demand. Each stakeholder, the government, upstream companies and oil marketing companies, is estimated to be faced with almost Rs60,000 crore (US$14.1 billion) each if the under-recoveries continue at the same level. The companies, which are incurring cash losses of Rs4,000 crore (US$940 million) a month, have recently appealed to the government urging immediate action on the price front. Industry analysts say the subsidies being provided by the government, almost Rs22 (US$0.52) per liter, are being diverted to customers who can afford to pay market prices. (May 9, 2008