BBC News reports that India is considering the possibility to close overnight all filling stations in the country in order to curtail fuel imports from abroad. In the long run, the government is going to lower the trade balance deficit and to back up the falling rupee this way.
According to Veerappa Moily, India’s Minister of Petroleum, the government is also launching the fuel saving program that is supposed to reduce the overall demand for petrol and other energy commodities by 3%. On the whole, all efforts suggested by the policy makers are meant to save 160 billion rupees ($2.4 billion) for the budget.
Moily highlighted that the resolution on closing petrol retail stations overnight has not been adopted yet, it is put forward for discussion at the highest circles of power. Later on, the government made the formal denial of the Minister’s statement.
In India, the trade balance deficit hit the record 6.7% of the GDP in the previous year. The key part in this trend is assigned to the petrol, its prices is keeping high while the consumption is steadily growing up.
On the international market, oil is traded for US dollars. Thus, Indian oil companies have to spend more foreign currency while the Central Bank has to sell it losing a part of its reserves. The daily demand for the currency from banks and corporations is estimated at nearly $300 billion.
In the current year, the rupee has plummeted by 20% against the US dollar. This has been the worst result among the local currencies on the huge emerging markets.