The Hindu : Tamil Nadu News : Diesel sale picks up, slump for petrol

Online edition of India's National Newspaper
Thursday, Apr 15, 2004

Tamil Nadu

Tamil Nadu

Diesel sale picks up, slump for petrol

By N. Ravi Kumar

CHENNAI, APRIL 14. Diesel price rose thrice and dropped five times in 2003-04, but this seems to have had little impact on consumers. Retail sale in Tamil Nadu and Pondicherry went up by nearly six per cent during the year.

The joy of the national oil companies over the growth, after suffering close to a four per cent decline in diesel sale in 2002-03, has, however, been nullified by a lower growth in consumption of petrol in the last fiscal. Though petrol (retail) sale in the State and the Union Territory increased by 7.28 per cent, it was lower than the 2002-03 growth-level.

Giving details of cumulative automobile fuel sale by the four national companies - Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation and IBP - in the last financial year, a senior IOC official said diesel consumption picked up only after the Centre had imposed restrictions on import of parallel market kerosene.

Known as `white kerosene,' the domestic fuel posed a serious threat to diesel sale, with more and more transporters preferring to operate on the imported product. According to the oil industry, use of kerosene in automobiles is detrimental not only to the engine health but also to environment. The Centre, however, issued a directive in late 2003 allowing only the national oil companies to import `white' kerosene. In March alone, IOC sold 98,000 tonnes of diesel, the official said.

The increase in diesel sale was due, apart from the issue of the directive, to the growing preference for new diesel vehicles, especially passenger cars and the overall rise in movement of goods, he said. Diesel price (in Chennai) came down by Rs.3.38 a litre between April and June, only to go up by Rs. 2.96 by the end of the fiscal.

Oil industry sources say the relative drop in the petrol consumption could be attributed to various reasons including drought in the State, which could have affected purchasing power. Petrol prices in Chennai dropped by Rs.3.45 a litre from April to June, before climbing by Rs.3.68 by March-end. Petrol and diesel price were last revised on January 1.

The second year after the dismantling of the administered pricing mechanism for petroleum products, however, was relatively good. In 2002-03, petrol prices rose by Rs.8.07 a litre, while diesel price went up by Rs.6.55.

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