Private refineries Reliance Industries and Essar Oil will supply diesel to the Railways, Lok Sabha was told today.
State-run oil companies including IOC, HPCL and BPCL are major suppliers of the fuel to the public transporter so far.
"Rate contracts have been signed with Reliance Industries and Essar Oil for supply of diesel," Minister of State for Railways Manoj Sinha said in a written reply.
Railways, the single largest bulk consumer of diesel in the country, requires about 2.5 billion liters of diesel a year and have to foot a bill of about Rs 17,000 cr.
Sinha said no priority has been given to private firms over the public sector oil companies.
"However, for locations where rates quoted by these firms were lowest at the time of opening of tenders, they have been given preference for supply at specific locations," Sinha said.
In order to reduce fuel consumption, railways have started using bio-diesel up to 5 per cent of the total fuel consumption in diesel locomotives.
