Petrol pumps in hinterland go dry, govt says sufficient supplies to meet demand

AgenciesUpdated: Wednesday, June 15, 2022, 10:53 PM IST
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Some petrol pumps in states like Madhya Pradesh, Rajasthan and Karnataka have run dry following a sudden surge in demand at PSU outlets that followed curtailment of operations by private fuel retailers to check the heavy losses they were suffering from trying to compete with heavily under-priced rates of public sector companies.

The government however said there were sufficient supplies of petrol and diesel to meet extra demand but admitted that the rush to PSU bunks was leading to delays and increased waiting time for customers.

PSU fuel retailers Indian Oil, HPCL and BPCL haven't raised petrol and diesel prices in tandem with the rise in crude oil (raw material cost). They sell petrol at a loss of Rs 14-18 per litre and diesel at Rs 20-25 - a loss that private retailers Nayara Energy, Jio-bp and Shell aren't able to absorb.

A few petrol pumps of Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) in states like Rajasthan and Madhya Pradesh ran out of fuel, particularly diesel after customers of private retailers shifted to them.

HPCL in a tweet stated that its pumps in Rajasthan had seen a near 41 per cent rise in petrol sales in May over the previous month and 32 per cent in diesel while sales of private companies fell 10.5 per cent and 30 per cent, respectively.

In Madhya Pradesh, the petrol sales rose 40.6 per cent and diesel by 46.1 per cent as compared to a 4.3 per cent and 29.5 per cent drop in private fuel retailers.

BPCL too has witnessed a similar volume surge in these states.

"In the past few days, some areas have reported a big increase in instances of rush at the PSU retail outlets (petrol pumps), leading to delays and increased waiting time for customers. This has, in turn, led to speculation of supply constraints by the public sector oil marketing companies," the oil ministry said in a statement.

At specific locations in some states, there has been a 50 per cent increase in demand for petrol and diesel in the first half of June over the corresponding period of last year.

"In particular, this has been noticed in Rajasthan, Madhya Pradesh and Karnataka," it said. "These are states where large quantity of supply was being done by retail outlets belonging to private marketing companies and where the distances from supply locations i.e. terminals and depots are longer." The ministry attributed the increase in demand to a seasonal surge due to agricultural activities, bulk buyers shifting their purchases to petrol pumps and a substantial reduction in the sales by private firms whose volumes shifted to PSU bunks.

It however did not say why the bulk buyers shifted or the reason for reduction in sales by private firms.

Industry sources said while petrol pump rates have not increased in tandem with cost, the price for bulk buyers such as state bus undertaking has gone up. And so the bulk buyers find it cheaper to fill at petrol pumps rather than buy directly from oil companies.

"The production of petrol and diesel in the country is more than sufficient to take care of any demand surge. This unprecedented growth has created some temporary logistics issues at the local level.

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