Wednesday, Sep 28, 2022
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Is There A Petrol, Diesel shortage in India? 

There have been long queues around fuel pumps in several parts of the country in the last few days as people rush to fill the fuel tanks of their vehicles

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PTI Photo

India seems to be facing a petrol and diesel shortage as fuel pumps have reportedly gone dry in several states including Uttarakhand, Rajasthan, Andhra Pradesh, and Madhya Pradesh. 

There have been long queues around fuel pumps in several parts of the country in the last few days as people rush to fill the fuel tanks of their vehicles. 

Several petrol pumps in and around Srinagar on Friday ran dry. Likewise, around 2,000 petrol pumps across Rajasthan have gone dry. 

The crisis, as per reports, has worsened in Andhra Pradesh as oil marketing companies are imposing ration in fuel supply. 

Rural areas have been worst affected by the crisis where small fuel stations with less fuel capacity are getting dried up at a faster pace. 

The situation is similar on several other pumps in urban areas, particularly at fuel stations operated by Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL). 

Even pumps run by private operators such as Reliance faced acute fuel shortages, and some of them reportedly went dry. 

Is India Facing Petrol, Diesel Shortage? 

Technically, there is a fuel shortage in some parts of the country. As per reports, dealer associations in states including Rajasthan, Madhya Pradesh, Gujarat and Tamil Nadu have reported a shortage, as many private fuel pumps have either shut or reduced sales.

They have complained that BPCL and HPCL have restricted the supply of petrol and diesel and are reportedly providing only 33 per cent of the total demand, which is leading to a crisis. 

The private sector companies have also, reportedly, stopped the sale of the fuel at the pumps owned by them.

Meanwhile, quelling the ongoing rumours of fuel crisis, V Satish Kumar, Director (Marketing) of Indian Oil Corporation (IOC), tweeted, “This is to assure that product availability at our retail outlets is absolutely normal. There is adequate product availability & supplies to all markets. We request you not to panic.” 

Does No Change In Fuel Prices Have Anything To Do With It? 

The state-run refiners have kept petrol and diesel prices same since April 6 despite the rising trend in international crude prices and have not passed on the increase in global crude oil prices to consumers. 

The OMCs have been reportedly incurring huge losses and have reduced the supplies to the outlets in many areas. 

As of June 16, state-run OMCs were incurring a Rs 19.7 per litre revenue loss on petrol and Rs 31.9 a litre on diesel, Hindustan Times reported quoting an executive working in a private oil company. 

What The Government Has To Say? 

The government has claimed that there is adequate fuel to meet the rising energy demand in the country and sufficient supplies of petrol and diesel are being made available to meet extra demand. 

The petroleum ministry said oil companies have increased stocks at depots and terminals by deploying more trucks to serve retail outlets and depots. Oil marketing companies have also made provisions for supply of more fuel in the affected states. 

The oil ministry has cited the surge in demand to a 50 per cent year-on-year growth in demand in June. The same period, last year, had seen very low demand due to covid-19. 

“It is a fact that at specific locations in some states, there has been a significant increase in demand for petrol and diesel, with an increase being as high as 50 per cent during the first half of June 2022 over corresponding period of last year. In particular, this has been noticed in Rajasthan, Madhya Pradesh and Karnataka,” Oil Ministry said. 

The government has also cited a surge in agricultural demand, shifting of bulk buyers to retail pumps, and temporary logistic issues as some of the reasons. 

“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,” according to the statement. 


What Oil Companies Said 

State-run oil companies including IOC, HPCL, and BPCL have rejected that there is any fuel shortage in the country and assured that there is no need to panic. 

IOC, BPCL and HPCL enjoy a monopoly in fuel trade, with about 90 per cent market share. 

"HPCL is meeting the ever growing fuel demands of the Country and assures & ensures availability of product across our supply chain. Our esteemed customers need not panic. We stand committed for uninterrupted supply of auto fuels in the markets, where we have our footprint," HPCL said in a tweet. 

"We assure everyone that there is adequate product availability at all our Fuel Stations, across our network. Therefore, there is no need to panic. We put on record our commitment for uninterrupted supplies of petrol and diesel in all markets where we have our presence," BPCL tweeted. 

The Plight Of Petroleum Dealers 

According to petroleum dealers, BPCL and HPCL have restricted the fuel supply and are providing only 33 per cent of total demand which is triggering the crisis. 

Rajasthan Petrol Dealers Association President Sunit Bagai said only Indian Oil Company is giving the entire supply. Likewise, several other dealers said fuel companies have started rationing and denying fuel on working credit to pump owners due to which there is a shortage.

Rajasthan Petroleum Dealers Association also sent a letter to the Petroleum Minister Hardeep Singh Puri complaining about the scarcity of supplies. 

Why Shortage In Some States Is High? 

Some states including Rajasthan and Madhya Pradesh, have heavy dependence on the fuel pumps run by private companies, which have shut or reduced fuel sales. 

In Rajasthan, fuel retail outlets run by private companies cater to 15-17 per cent of the fuel demand. Similarly, private companies own 500 out of the total 4,900 pumps in Madhya Pradesh. 

Will The Fuel Shortage Continue? 

As per reports, petrol pump associations have said supplies have increased. According to the Rajasthan Petroleum Dealers’ Association, supplies are now adequate in Jaipur, but rural pumps are struggling. 

That said, the shortage is likely to continue as it will take some days for the supplies to be restored in several parts of the country. 

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