A deficient monsoon combined with the chronic power shortage pushed up diesel sales by 13 per cent in July, a growth pattern that is bound to provide more ammunition to the State-owned oil marketing companies’ demand for a hike in the price of the fuel.
The companies, for whom the under-recovery on diesel is nearly Rs.14 a litre, have been pleading with the government for months to raise the prices of not just diesel, but also of cooking gas and kerosene. While the mounting under-recovery, which touched Rs.47,811 crore in the first quarter, is an immediate concern, the long-term issues include impact on their profitability and capital expenditure.
The July 2012 industry sales review report of the Petroleum Planning & Analysis Cell shows that diesel consumption was dominated by the monsoon factor. “The rain deficiency was particularly acute in West Rajasthan, Haryana and Punjab. The shortfall was over 20 per cent in Himachal Pradesh, Jammu & Kashmir, East Rajasthan, Delhi, West Uttar Pradesh, Gujarat, Karnataka and Kerala,” it said. Most of the rain-deficient States recorded high diesel sales growth as use of pump sets goes up for irrigation. While the growth in diesel sales was 26.6 per cent in Haryana, it was 23.6 per cent in Punjab and 20.1 in Rajasthan.
Besides poor monsoon, “power deficit also added to the consumption. This month [July] also power shortage is high at 9.1 per cent. It is more than not only the corresponding month of the previous year (4.9 per cent) but also in comparison to the previous month (8.6 per cent). Power position is worsening over the months,” the report said. The deficit was in double digit in many States, including Haryana, Uttar Pradesh, and Andhra Pradesh in July.
