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Cut in oil imports will lead to supply shortages: oil firms

business Updated: May 20, 2012 22:53 IST
Anupama Airy

Pay the right price for fuel or face supply disruptions.

Finance minister Pranab Mukherjee’s statement on reducing oil imports in the wake of a sharp rise in global prices has got oil companies worried, who feel the move could lead to disruptions in the supply of petrol, diesel and cooking gas (LPG) in the domestic market.

"We are still awaiting a clarity on the extent of cut that will be imposed on crude oil imports," said a chairman of a state-owned oil company on the condition of anonymity."Whatever be the cut, it is bound to have an impact on the free supply of petroleum products in the country."

Amidst rising global crude oil prices, Mukherjee had warned in Parliament last week of disastrous consequences if corrective steps were not taken to solve the problem. He has asked oil experts and chairman of the Prime Minister’s Economic Advisory Council (PMEAC) to find out if the country can reduce its oil import requirement.

The chairman of another leading state-owned oil company said that “restricting oil imports” is not the solution. “We need to regularly increase the price of petroleum products whenever global oil prices go up. By reducing oil imports, we will only turn our refineries unviable, besides creating products shortage in the market.”