India fuel station
An employee counts money at a fuel station in Kolkata, India. (Reuters) Reuters

India's proposal to shut down fuel pumps at night to reduce consumption and cut oil import bills has been widely criticised over its feasibility and effectiveness.

Oil Minister Veerappa Moily has said that the country, which is suffering from a depreciating currency and widening current account deficit, is looking for options to reduce its import bills.

The minister noted that India is considering shutting down fuel pumps at 8pm. Oil imports are large contributors to the country's gaping trade deficit, which occurs when the value of a country's total imports is greater than its total exports.

India's oil ministry is looking to cut fuel consumption by 3%, which would help save an estimated 160bn rupees ($2.4bn; £1.6bn) in foreign exchange outflow from the country, according to The Press Trust of India (PTI) news agency.

"There are various options and ideas that have been floated," Moily told the media.

"Shutting petrol pumps during night is one of them. But we have not decided. It is just a proposal."

The proposal came after the country hiked fuel prices with petrol prices being raised by 2.35 rupees per litre and diesel by 50 paise per litre.

The Prime Minister's Office later rejected the fuel blackout proposal, saying the improper measure will send a bad signal. Finance Minister P. Chidambaram also rejected it.

"It's not a government suggestion, but one which had come from the public as the Oil Minister has himself clarified," Chidambaram said.

Reactions

The proposal was severely criticised by the opposition Bharatiya Janata Party (BJP).

BJP leader Yashwant Sinha opposed the suggestions saying it derail the economic situation.

"Why is the government making such suggestions? This will only worsen the situation in the country. I strongly oppose the suggestion," he said.

BJP spokesman Shahnawaz Hussain said: "Not only petrol pumps, but this government is capable of shutting down this country. If petrol pumps are closed at night, won't people fill the fuel in the morning. Rather than coming up with these suggestions ministers should cut down on their expenditures and should return their cars.

"This decision is preposterous. This is like a pre-economic emergency crisis. We condemn this. The government should take oil from Iran," said Communist Party of India leader Gurudas Dagupta.

Business people also blamed the proposal.

"Will Veerappa Moily's call for shutting petrol stations at 8PM really reduce consumption? No. What about job losses because of this?" Indian entrepreneur Kiran Mazumdar-Shaw tweeted.

"This idea to keep petrol pumps closed from 8pm to 8am is a very ill-advised idea. It's not going to work. This idea if implemented will create black market and panic. You can put some night surcharge but don't stop selling it," said petroleum sector analyst Narendra Taneja.

Author Chetan Bhagat tweeted: "Petrol pumps closed after 8pm? To reduce demand? Dude, people are buying fuel, not whisky!"

More Imports from Iran

Moily also said that India could save $8.5bn in foreign exchange spending on crude oil imports in fiscal year 2013/14 if it imports more supplies from Iran, which accepts payments in rupees.

In a letter to Prime Minister Manmohan Singh, he said that country may import about 13 million tonnes of oil from Iran in the ongoing fiscal year. It has so far imported 2 million tonnes of oil from Iran in the fiscal year started in April.

"An additional import of 11 million tonnes during 2013/14 would result in reduction in forex outflow by $8.47bn (considering the international price of crude oil at $105 per barrel)," the letter, seen by Reuters, said.

Last year, India had imported more than 13 million tonnes of oil from Iran.

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