"It is not possible to absorb the high cost. Ultimately it will go to the consumer," said Mohit Jain, director at Gurgaon based The Malt Company (India) Ltd. His is one of the many companies in the area which rely on diesel-fired captive gensets in the power-starved state of Haryana.
Not surprisingly therefore, the subsidised diesel meant for the transport sector has increasingly been finding its way to sectors like power and fuelling demand for the commodity.
In the last few months, diesel demand has been growing at 16-17 per cent against a trend rate of 7-9 per cent earlier. "People are shifting from dirtier fuels to diesel, because it is cheaper," explained an oil company official, though the quantum of such diversion to the non-transport sector was not available.
In Pune, companies were jointly generating 80 Mw to 100 Mw electricity using their own diesel gensets to ensure continuous 24 hours power supply, since the Maharashtra State Electricity Board Ltd (MSEDCL) could not meet the power consumption demands of the higly industrialised city.
Retails chains and telecom business are the two prominent sectors buying gensets. Speaking to Business Standard, Cummins Generation Technologies (CGT) Managing Director Pradeep Bhargava said, "The overall diesel genset business in India is growing at a rate of 20 to 25 per cent annually. With the power situation showing no signs of change, it will keep growing at least for five years at a similar rate."
There is however not a direct one-on-one correlation between the sale in gensets and diesel consumption as most of the gensets do not operate round the clock."
"Apart from this, the IT companies and manufacturing sector units are buying gensets in the larger range," added Bhargava.
CGT has recently launched a new manufacturing factory in Ranjangaon near Pune that, in its first phase, will deliver 75,000 alternate current generators. Cummins Power Generation, another group company, too launched a new unit in Pirangut near Pune that delivers 50,000 gensets every year.
