The country had till then imported 4.1 million tonne of its largest selling petroleum product, compared to 10.48 million tonne in the whole of 1998-99 and 14.07 million tonne in the 1997-98 fiscal. Ramachandran was obviouisly pegging his projections on the 22 million tonne of new refining capacity that had gone on stream just then and was about to throw up fresh gallons of middle distillates, like diesel, jet fuel and kerosene. Think tanks in government and industry had actually predicted an ``exportable surplus'' of 2.5 million tonne of diesel and 1.55 million tonne of petrol by January this year, which is now.

There are no invoices for exports in sight as yet. On the contrary, the canalising agency for crude and petroleum products, IndianOil Corporation (IOC), was found tendering for fresh diesel imports, despite the sky-high prices reigning in the oil marts around the world.

Product availability estimates have, obviously, gone completely haywire in the last three months. So, what went wrong? A great deal, apparently. Part of Indian Oil Corporation's panic buying in Southeast Asia was to stock up essential diesel (which makes up more than 40 per cent of all the petroleum products sold within India) before the country's public sector-dominated petroleum industry goes on strike.

Last week union minister for petroleum and natural gas Ram Naik managed to pursuade some of the petroleum industry workers' unions and the Oil Sector Officers' Association to call off the strike, but Indian Oil had opened tenders by then.

The oil industry strike call (to protest against wage revision terms) was followed by the strike call by port and dock workers. At the time of writing, port officers have indicated a plan to ``defer'' the strike, but port workersare still steadfast in their resolve to bring port handling operations to a standstill after Monday (January 17.)

The contingency plan to stock up petroleum products before the stirs at refineries and ports was understandable, but why diesel? The projections for a surfeit in high speed diesel (HSD) in the middle of last year, prompted the petroleum ministry to direct petroleum refineries to push up superior kerosene oil (SKO) production.

Since middle distillates spewed out by a petroleum refinery are made up of both HSD and SKO, more kerosene can be processed in place of an undesirable surplus in diesel. Considering that kerosene was to remain in short-supply and diesel was to be in surplus, the directive made sense.

Industry sources think now, that the directive was partly responsible for jeopardising diesel output projections. The supply plan entitlements (SPE) given to oil companies required that they step up superior kerosene oil production to nine per cent of the total refinery throughput,instead of seven per cent. Since diesel prices are more lucrative than kerosene prices, petroleum refining companies may have been tempted to pare down the refinery throughput, altogether.

There are indications now that the decision of eight petroleum refineries in the country to resort to a ``routine'' shutdown in November and December 1999, did impact the availability of petroleum products in the country. As a result, the country is still importing four cargoes of diesel a month, just as it was before the new refineries at Jamnagar (Reliance Petroleum Limited), Panipat (Indian Oil Corporation) and Numaligarh (Numaligarh Refinery Limited) went on stream, promising to slosh the Indian market with petrol, diesel and naphtha.