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The first signs of a shortage of diesel are being seen in the northern states.

"For the last month, petrol pump dealers, particularly of the Bharat Petroleum Corporation, have been facing supply shortage," said Ajay Bansal, general secretary of the Federation of All India Petroleum Traders.

Source:
Diesel supply dries up in North India

Not good at all!! Dont tell me India will also go the London way where Diesel is costlier than Petrol (read this on one of the threads in T-Bhp itself) I was always under the impression that in India, Diesel prices will always remain cheaper since the transport industry and the agriculture industry use it for their daily needs. But the way things are going and the demand for diesel rising, i would not be surprised if Diesel is priced 5 or 10 rupees higher than petrol in the near future. :Frustrati

I can only pray that this doesnt happen :(

Nothing to worry, Diesels in India will never become pricier than petrol unless the government decides to give special cards to farmers and transporters for budget diesel. I don't see any likely implementation of such schemes in atleast the near future.

But on the whole our diesel prices will increase by some amount more than petrol prices in the near future and may reach the price of petrol.

The problem currently is that we can only get so much amount of diesel from a given crude oil and so much amount of petrol. Since we are not in too much need of petrol, we are facing diesel shortage(no shocks but we need much more diesel than petrol, about 60% vehicles in India are diesels, including busses, trains, trucks, cars, other forms of transport and small power generation systems).

This can be overcome by the fact that the worlds biggest oil consumer consumes most of it in petrol form, so we need good export policy to export petrol or our oil companies have to continue importing diesel(refined) like they are doing now.

Other available solution is there are some processes using which the carbon content in the fuel can be changed, like the Fischer-Tropsh process. Shell is researching on BTL(Biomass to Liquid) technology using which we can manufacture pretty much what fuel we want from bio-waste. Ofcourse these alternate options will become viable only when the price of fuel crosses some limit and our government supports them(this is why they have not been here for all this while).

Apart from this we have the Bio-diesel to embrace, manufactured from jatropa seeds(nonedible oil). I have heard that every farmer can grow these plants atleast once in a year(non crop season) to improve the nitrogen content in the land. Also our Railways have commited lands to grow Jatropa.
To make this option viable, government can use the oppertunity in helping small time people(Small scale business) set up small Jatropa processing facilities around the country creating healthy feed of Bio-diesel atleast for trucks, busses and other farm equipment. Ofcourse the big oil companies will be against all this as they loose market, but if our government does not increase the diesel prices, they too may join the cause as every litre they sell, they loose money.

I have heard that in brazil Fiat is developing engine that can run on almost any combustible liquid, they already have Tetra fuel vehicles cars that run on petrol/alchol/LPG/CNG. But the new engine can also run on diesel and other heavy oil fuels(dont ask me how). These vehicles can give stability to car owners from the auto makers side.

As a longer term solution, they can also give us diesel/petrol hybrids. If they put it in market now, they will see a superb increase in sales once the price starts climbing, which will happen any time within 6 months(there is no containing it).

On the long term bassis, many cities in our country have started making right notes about Public transport, learn about them and see if it can fit your needs, you can save a lot of money and stress over time. Public transport is the only way governments can save city dwellers. As more people start using them, the demand for fuel will lower and so the cost. So, if you cannot use public transport don't bother, just hope that government take steps to make success the public transport solutions.

Any other availble solutions ?

Hey there Arunmur, very informative, but we have to see what of the above available solutions will the Govt of India allow to be implemented. With such a corrupt system, I doubt if tetra fuel cars will ever make it to India. But there is nothing like it if they do come to India! :D

As of the rate the world oil industry is going now, shortages of fuel should always be expected once in a while in the near future. Our governments know this well and I'm sure they are working out some backup options to save their skins. How much is that going to be effective is a big question though.

Diesel prices will close in with the petrol prices soon. This is just a matter of time as many countries have already adapted this method and we'll be forced to follow too.

@Arun. It was a very informative post from you. Thanks. And special thanks to Abhinav for making us understand the importance of the post by quoting the whole thing again. ;)

No way the government can raise diesel prices to match petrols. They will face nothing short of a revolt from the public then. India runs on diesel. Everything from trains, to trucks, to power generators, everything uses diesel.

Minor price rise will be digested without too much political fuss (but will increase the inflation even more!).

However, as far as shortage is concerned, the easiest way is to get rid of policies that penalize private players like Reliance, and let them compete on equal footing with IOC et al.

I am sure Mukes-bhai can negotiate far better deals with the Chevron, Exxon, Shell cartel in Iraq than the combined babudom of MEA and PMO.

Wasnt there a guy in Tamil Nadu who claimed to have found a wonder process for fuel some years ago. Is he still alive or has he been buried by the oil companies?
In the US, people use some crazy fuels. I have heard of people going to KFC, McDonald's, etc, and then getting their used frying oil, and refining it and using it in cars. Of course, this is not legal there, but :p
Hybrids are also a good way to reduce fuel consumption. I think they only use fuel when starting and since most of them use regenerative braking power, we can brake to our hearts content in the cities.
I dunno if I want Mukesh-bhai controlling my diesel too :p

It's a situation for the oil companies where the more they produce, the higher their loss. As people's income and aspirations rise, their consumption keeps increasing. In countries like the US, they adjust by raising the prices, which automatically results in a decrease in consumption, as most people have a fixed budget. Unfortunately in India, it is not feasible to raise the price for political reasons. So, maybe the oil cos have probably gone for the next best thing, which is to limit the supply and hence the shortage.

I think what the government should do is add additional tax atleast 5%) on diesel cars (MUVs included). This will make people opt for petrol version thereby reducing demand for diesel. Not to mention, it will also reduce pollution.

I dont think this is true. Emission of the modern diesel cars, though might not be at par with the petrol ones but its not as bad as you claim above AFAIK. The case in question being the modern CRDi & multijet engines used in today's carswhich are very clean when it comes to emissions. Experts comments please.

When I was in US last time, I found that Diesel is *always* more expensive than Petrol by a good margin (about 1 USD per gallon)

I was surprised to see that... Based on an earlier reply, looks like Diesel cost overtook petrol in UK too!

Isn't it the other way round? AFAIK, its the petrol engines that pollute more. However, its just that the smoke is visible in case of diesel cars.

Where did you get this information. Apart from CO2 (that too only from really modern diesels), diesel produces far more pollutants (and dangerous ones) than petrol.