1. Defence Declares War on Fuel-Driven Costs
The defence ministry has asked the armed forces to reduce fuel use by 20-40% as the
sharp increase in prices has upset budget calculations, leaving soldiers, commanders and
analysts bewildered and worried about the country’s overall defence preparedness.
Pilots are wondering if they should fly fighter jets with half full tanks while the army is
struggling to find ways to economise on crucial movement of men and material across
rough terrain or to cut the use of diesel in lighting up camps and barracks in remote areas
along the 15,000-km international border, where many stretches are not connected to the
electricity grid. Official sources said the supplies and transport directorate under the
defence ministry recently wrote to defence commands, saying allocation of various fuels
would be cut by 20-40% in the current fiscal, depending on specific requirements and
unique needs of the army, navy and air force. Rising electricity tariff across the nation
too has inflated expenditure on large cantonments and defence
establishments. International crude prices, which have risen 8% in the past week, as well
as the depreciating rupee, which is sinking to record lows, have made diesel for bulk
buyers nearly 20% costlier than the state-set rates for motorists. While state transport
undertakings have happily switched to petrol pumps, the defence forces have no such
option. Experts are worried. “As it is, the frequency of core-level exercises has come
down due to limited fuel. Mechanised exercises of defence forces are becoming
expensive. If fuel prices go up further, there will be more limitations in training our
armed forces,” said Lieutenant General (retd) Prakash Katoch, who has co-authored the
book India’s Special Forces. Measly Hike in Defence Budget this Fiscal
Defence forces, among the biggest fuel consumers in India, spent over Rs. 7,000 crore
on petroleum products in 2012-13. This includes Rs. 4,090 crore spent by the air force
and Rs. 1,661 crore by the navy, according to Laxman Behera, research fellow at the
Institute for Defence Studies and Analysis (IDSA). The defence budget for 2013-14 rose
barely 5.3% to Rs. 2,03,672 crore, compared with the 17.6% expansion in the previous
budget. Behera terms this growth as negative in view of rising fuel prices and inflation.
Air Commodore (retd) Jasjit Singh, director-general of the Centre for Air Power Studies,
questioned the wisdom of cutting fuel supply. “It is possible for private airlines to save
fuel by managing routes efficiently. But you cannot fly combat aircraft with half-full
tanks. I am not aware on what basis the instructions have been given to reduce fuel
consumption. I don’t know how to save ATF in training. Movement of all supplies
requires fuel. What we need is more efficient vehicles. However, changing your fleet
also involves a huge cost,” Singh said. He said inadequate fuel may hit peacetime

2. activities such as training and overall preparedness. Oil industry executives said prices
had been adjusted in line with market trends. “In the past six to eight weeks, with the
weakening of the rupee against the dollar and firming up of crude oil prices, the
difference between retail and bulk diesel price has gone up by over Rs. 9 per litre. With
diesel price rising for institutional consumers, state transport undertakings are
purchasing fuel from our retail network resulting in a 60% drop in our bulk trade,” said
N Srikumar, executive director of IOC. The state-run company meets most of the
petroleum product needs of defence forces. Defence personnel said the forces were
doing their best to save on costs. “In the past five years, prices of diesel and LPG have
gone up by 20-25% and 150-300%, respectively. The quantities of fuel allotted to the
commands are enhanced or reduced based on the change in prices. However, austerity
measures have been instituted to save revenue expenditure as fuel prices are going up.
Energy conservation is something all of us are seized of and we are trying to save costs,”
said a defence ministry official, who did not want to be identified. He said the ministry
has not sought any relief from the ministries of finance and petroleum. Sources said the
annual allocation of jet fuel will be reduced by 20% of the average consumption last
year while petrol and diesel supplies will be reduced even more.
“You cannot cut salary, LPG consumption to feed personnel and certain other operations
in defence activities. Hence, decision-makers prefer to control spend on energy first,
when they have to reduce revenue expenditure. However, cutting down energy
consumption hits your defence preparedness as soldiers are less mobile and not very
welltrained, especially in case of air force and navy, where one must gain experience of
a certain numbers hours of flying and sailing every year,” said Behera of IDSA.
CREATED BY TEAM PGC
PROGLOBAL CORP
WWW.PROGLOBALCORP.COM
Proglobalcorp.wordpress.com
Email:proglobalcorp@gmail.com