India\u2019s biggest refiner-marketer, IndianOil Corporation, has warned the government that reduction in gas supplies from RIL\u2019s showcase Andhra offshore field may spark shortage of diesel and force imports to bridge the gap. \nThe state-run company has told the oil ministry that the reduction in gas supplies may also render infructuous the huge investments made in upgrading refinery systems for using gas as fuel and considerably raise emission levels of greenhouse gases, responsible for global warming.
\nReliance cut supplies to non-core industries such as refineries, petrochemicals and steel plants from May 9 under government orders.
\nThe ministry ordered RIL to cut supplies in proportion to allocations made to units after production from the Andhra offshore field dropped a tad below 50 mcmd (million cubic metres per day) from over 60 mcmd.
\nIOC executives said the cut in gas supply would force the company to use about 200,000 tonnes of diesel as substitute fuel at its Gujarat refinery \u201cwith resultant reduction in supply to market\u201d.
\n \u201cShortfall in HSD (diesel) from refinery has to be compensated through imports to meet market demand,\u201d a senior executive said.
\nIOC reckons it would lose `460 crore annually on burning diesel as a replacement fuel, which would also reduce 1.4% of distillate yield from its Gujarat refinery. The Gujarat unit is IOC\u2019s third major refinery after Panipat and Mathura plants.
\nThe government had allocated 1.6 mcmd of gas for IOC\u2019s refineries. It also earmarked another 1.9 mcmd on fallback basis (if some unit for any reason does not use the quantity allocated to it).
\nBut the company was able to ink purchase agreement for only 0.9 mcmd to Gujarat refinery since RIL\u2019s output dropped.<\/p>\n
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