Stock levels fell because of a spike in diesel consumption for back-up power generators following a shortfall in coal supplies late last year that caused several blackouts in the country, one of the sources said.
"All of a sudden diesel growth was up about 18 percent in November, compared to the projected seven percent growth ... so there has been a need for diesel imports into India," he said.
Indian Oil Corp is now seeking 60,000 tonnes of either 320 ppm or 40 ppm sulphur diesel for delivery into Chennai, Vizag or Paradip over Feb. 16-20. The tender closes on Jan. 30.
The state-owned refiner had earlier bought 60,000 tonnes of 320 ppm sulphur diesel for delivery into the same ports over Jan. 17-19 from Itochu, after an eight-month hiatus.
More recently, Hindustan Petroleum Corp bought 140,000 tonnes of diesel for January and February from BP and Mitsui, for the first time in nine months.
Diesel demand in India has been growing steadily as diesel-powered cars increase, with buyers willing to wait months to take delivery because of a widening gap between prices of gasoline and diesel.
State-owned refiners had stayed away from the international spot market for diesel until late last year due to a weaker economy and increased output from new refineries.
But with domestic demand growing and two new refineries still operating at reduced rates, state-owned refiners are not expected to cease diesel imports yet, traders said.