Musings: Diesel crisis and rain

written by Unknown at Saturday, July 26, 2008

The oil companies are selling Diesel at a loss.
When the demand is more the loss is more.
Demand is more when there is no rainfall.
So in this situation, what the oil companies are doing?

Read below-

Oil companies pray for rains
Deccan Chronicle, Hyderabad, July 23, 2008

Oil marketing companies are praying for rain as they are unable to meet the huge diesel demand due to frequent power cuts. The demand for diesel has gone up to 2.6 lakh litres per day against 1.6 lakh litres. This is because construction companies and commercial establishments have been forced to use generators.

Following frequent power-cuts, oil companies such as HPCL, BPCL and IndianOil have made arrangements to ferry an additional 1,00,000 litres of diesel from Kochi and Chennai. But even if the companies manage to get diesel, there are not enough oil tankers to ferry the fuel to various localities from the storage points located as Charlapalli and Ghatkesar.

Currently, oil companies have only 100 tankers, which are not sufficient to handle the additional - oil demand. "It has become a very difficult task for us to arrange additional oil tankers to tide over the crisis.

Contractors on an annual basis arrange most of the tankers. It is not so easy to mobilise the tankers immediately even though we have permission from the head offices," said a senior executive of an oil marketing company.

Meanwhile, several bunks in the city continue to hang no stock boards. The situation is worse on highways. The entire transport industry has been affected because of diesel shortage. This has forced hundreds of lorry owners not to run their vehicles unless the situation is improve. Some lorry owner's fear that vehicles will be stranded at far away places and goods will not be delivered on time.

"The whole industry is in trouble. Both the state government and oil companies have to resolve the problem immediately," said Mr Y.V. Eswara Rao, the general secretary of AP Lorry Owners Association.

Read more about Diesel in India here and petrol here and here.