The government on Wednesday issued a strict warning to industrial consumers who are purchasing diesel from retail outlets due to differential pricing, creating an artificial shortage of fuel in parts of the country. It assured that there were more than adequate supplies of petrol and diesel to meet demand.
Government's warning and action plan
The government stated that industrial consumers were diverting their purchases to retail pumps, causing local shortages at the expense of ordinary citizens. It urged industry associations to make them aware of the consequences of such violations. It also asked states and union territories to form special squads and take strict action against bulk consumers buying from retail outlets, hoarders, and black marketeers under the relevant provisions of the Essential Commodities Act and control orders.
Shift in diesel sales volumes
According to the government, nearly 29% of bulk diesel volumes from public sector oil retailers shifted to retail outlets in the current month. Additionally, there was a 38% decline in sales volumes at fuel stations run by private oil marketing companies.
Price disparity
While diesel in Delhi costs Rs 95.2 per litre for retail consumers, bulk consumers such as industries pay Rs 134 per litre. Private oil retailers also sell diesel for more than Rs 130 per litre. Officials noted frequent reports of shortages at retail outlets from various parts of the country, prompting an assessment by the ministry of petroleum and oil marketing companies. The assessment found that bulk consumers were making purchases from retail outlets.
Government coordination
Petroleum Minister Hardeep Singh Puri coordinated with public sector oil marketing companies (OMCs), states, and industry bodies to ensure uninterrupted supply of petrol and diesel. Petroleum Secretary Neeraj Mittal also held a review meeting with chief secretaries of states and union territories, attended by industry bodies FICCI and CII.
The petroleum ministry stated, 'The picture that emerges from the field is consistent. There is no scarcity of any petroleum product. There is, in pockets, a pattern of arbitrage that is creating the appearance of one.'
Impact of West Asia disruptions
Amid the West Asia disruptions, state-run OMCs have deliberately kept petrol and diesel prices low to protect retail customers, including households, two-wheeler commuters, and farmers at the pump, while absorbing losses of around Rs 550 crore per day on the sale of petrol, diesel, and domestic LPG. The government clarified that this policy does not extend to industrial procurement, where pricing tracks international actuals as a matter of standing policy.
