India Doubles Term Deal For Diesel Imports

India has more than doubled annual term diesel imports to 3.74 million tonnes for 1997-1998 compared with a year earlier as exporters sought to secure market share in the face of a possible glut, industry sources said on Monday.

Indian Oil Corp (IOC) awarded a one-year term contract to import high speed diesel -- used mostly for transport -- for delivery from June 1997 to May 1998 at about 50 cents below last year's awarded price, traders said.

India's current term contracts call for the import of 1.3 million tonnes in the year to the end of May But the 1997/1998 tender agreement was likely to mean that India would cut monthly spot imports by about 20 percent, traders said.

 

"We have already seen this in the June spot import (tender)," one trader said.

Early this month, IOC bought 270,000 tonnes of 1.0-percent sulphur diesel for June delivery after it had secured 870,000 tonnes for May delivery. Traders said they were not surprised by IOC's decision to buy more term cargoes as the offers were well below prevailing spot prices in the market.