India ponders fuel sale ban at night

India fuel pubp shutdown

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.

India’s oil imports are one of the biggest contributors to its widening current account deficit – a key area of concern for policymakers.

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.

‘Strange move’

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Won’t the people fill their car fuel tanks in the morning. This is a strange move”

Shahnawaz HussainBharatiya Janata Party

India has been struggling to contain its current account deficit – which is the broadest measure of a country’s overall trade.

A deficit occurs when a country’s import bill exceeds its earnings from exports and a widening deficit puts strain on the country’s foreign exchange reserves.

In India’s case, the deficit hit a record high of 6.7% of gross domestic product (GDP) last year, prompting calls for policymakers to take steps to contain it.

The sharp decline in India’s currency, which has dipped almost 20% against the US dollar this year, has only complicated the situation.

India has taken some measures to try to tackle the issue.

Last week, the central bank said that it would sell US dollars to three state-run oil firms in an attempt to stem the decline in the rupee.

Global oil contracts are mostly settled in US dollars. As a result, Indian oil firms need to sell rupees to buy US dollars to pay for imports.

The central bank’s decision is expected to take the bulk of their dollar demand, estimated to be around $300m (£190m) per day, away from the foreign-exchange market and help support the rupee.

It has also raised the import duty on gold – another key contributor to the deficit – three times this year to try to curb imports of the precious metal.

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.