• PAGE ONE
• INDEX
• HOME

Meet to discuss surplus diesel

Our Bureau

NEW DELHI, June 4

THE Ministry of Petroleum and Natural Gas will hold a meeting on Monday to address the issue of surplus diesel resulting from a glut in the market, according to senior officials.

Roughly 1,34,000 tonnes of diesel is floating in vessels in high seas off the coast of Mumbai owing to lack of demand. The diesel is largely from Reliance's 27 million tonnes Jamnagar refinery.

Sources said that although the marketing contract of public sector oil companies with Reliance Petroleum Ltd does not assure offtake beyond domestic consumption, the floating consignment relates to the Oil Economy Board's (OEB's) production quota (for re finers) for April and May. Reliance has already purchased advanced licences for export of petro products.

The Ministry is considering options ranging from allowing power plants to use diesel as fuel to modifying the product mix at the refinery, which could be done by cutting diesel production and increasing naphtha output.

In the event of a cut in diesel production or crude throughput, the Oil Coordination Committee (OCC) would have to decide on the basis of the cut _ whether to adopt a least cost transportation model or the refinery capacity.

The least cost transportation model will optimise the refinery cut on the basis of product demand on a spatial basis.