India ‘may halt diesel imports’, deal with private refiners.

NEW DELHI: India's state refiners may halt diesel imports after working out a temporary mechanism to resume buying the fuel from private processors if global diesel prices remain at current levels, two refinery sources said.

State refiners stepped up imports in recent months after private refiners refused to continue absorbing sales tax and coastal freight costs, making the domestic fuel more expensive.

Indian imports were a factor behind the stronger Asian gas oil crack, which has been holding near $12 a barrel for the fifth straight session on Monday, after almost doubling to $11.74 on June 2 from this year's low on April 6.

Under the latest arrangement, private refiners will pay the central sales tax and state-run marketing firms will pay coastal freight costs for interstate cargoes shipped from plants in Gujarat, the sources said.

India's diesel use is rising along with an economy that grew by 7.6 per cent in the financial year to March 31. In the last fiscal year, India's diesel demand grew 7.5 per cent, which is its fastest pace in four years.

Source : timesofindia.indiatimes.com