Friday, Mar 21, 2003
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By Our Special Correspondent
NEW DELHI, MARCH 20. The Government today gave an assurance that there will be no shortages of petroleum products even if supplies from Iraq are disrupted due to the war. Putting into action a contingency plan to ensure regular supplies of oil products shortly after news of the war broke-out, the Petroleum Ministry held a series of meetings with oil industry representatives during the course of the day.
The Petroleum Secretary, B. K. Chaturvedi, said, "We have enough stocks to meet country's oil demand for next two months.''
He stressed that the war is not likely to have any impact on the country's oil supplies. As for the contingency plan, he said it involved shoring up of stocks, ensuring continuous supplies at all places and seeing that retail prices are at reasonable level.
While he did not comment on the fact that petrol and diesel prices have risen by around Rs. 5 a litre since January owing to hardening of prices in world markets, he disclosed that talks were under way with the Finance Ministry on the need to cut duties. He assured that excise and customs levies on crude oil and petroleum product would be cut if global crude oil prices rise.
In case of crude prices rising steeply, he said there could be a temporary provision to stop procurement and exhaust the current stockpile of close to 25 days.
At present there is a domestic crude oil stockpile of 12 days requirement while another 11 days stocks are in transit.
On the duration of the war, he was optimistic that it would be brief and may not have a significant impact on crude oil prices. At the same time, he said developments on the Iraq front were being closely monitored.
He recalled that during the Gulf war in 1991, there were no supply disruptions while prices had risen to around $39 a barrel but for a short while.
Now he felt the country had the capacity to finance a higher import bill in case global prices ultimately due rise sharply. The present scenario, however, is that world crude oil prices are actually declining in anticipation of a short and swift war in Iraq.
He said public sector oil companies had already shifted their spot purchases from countries outside the conflict zone like Malaysia, Nigeria, Egypt, Libya, West Africa and the countries near the Red Sea. With India importing less than 5 per cent of its crude oil requirement of 78.7 million tonnes from Iraq, he said alternative arrangements had been made to meet that requirement.
The private sector Reliance Industries' refinery in Jamnagar in the Saurashtra coast of Gujarat sees no problem in refining crude oil due to the Iraq war.
"The refinery has sufficient supply of crude oil and in addition several ships are right now on the high seas bringing more crude to the Reliance refinery for processing," a company official said.
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