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India Considers Nighttime Fuel Pump Shutdown
BBC NEWS, BUSINESS
September 2, 2013: India is considering a proposal to shut fuel pumps at night as it looks at ways to cut its oil import bill, its oil minister Veerappa Moily has said. Mr Moily said the idea was one of many options the government was considering. Mr Moily said his ministry would also launch a conservation drive later this month to try to cut fuel demand by 3%. The Press Trust of India (PTI) news agency said that cutting down demand by that amount would help save an estimated 160bn rupees ($2.4bn; £1.6bn) in foreign exchange outflow from the country. "There are various options and ideas that have been floated," Mr Moily was quoted as saying by the PTI news agency. "Shutting petrol pumps during night is one of them. But we have not decided. It is just a proposal," he added.
India's oil imports are one of the biggest contributors to its widening current account deficit - a key area of concern for policymakers.
However, India's biggest opposition party raised doubts whether the latest proposal to shut fuel pumps at night would be effective. "Won't the people fill their car fuel tanks in the morning. This is a strange move," Shahnawaz Hussain, the spokesman for the Bharatiya Janata Party (BJP) was quoted as saying by the PTI news agency.
India imports nearly 80% of all its fuel requirements. However, the government subsidizes fuel prices, including those of diesel, cooking gas and kerosene, to help the poor and keep inflation in check. But the policy has resulted in a growing deficit, and there have been concerns that it may be hurting India's overall economic growth.
India's total fuel-subsidy bill for the financial year to 31 March 2013 was 1.6 trillion rupees. As a result, there have been calls for the government to scale back the program and bring down the deficit.
"These fuel subsidies usually go the segment of the population that is not needy," said Nitin Pai, director of Takshashila Institution, a Bangalore-based independent think tank. "The primary reason they are being continued is to prevent an outcry in the country and keep the middle class happy. "Instead of running around and coming up with the short-term solutions like shutting down pumps at night - the government needs to bite the bullet and lift all unnecessary subsidies," he added.
