The government has directed state-run fuel retailers to expand liquefied petroleum gas (LPG) storage capacity to cover at least 30 days of demand, following supply disruptions linked to the West Asia conflict that underscored the need for larger reserves, according to a PTI report.
Strategic Reserves Plan
"We are working on the strategic reserves. Oil marketing companies have been asked to work out a plan to have LPG reserves for a minimum of 30 days with them, and they are working on it," said Sujata Sharma, Joint Secretary in the Petroleum Ministry, during a press briefing on Friday.
State-run oil marketing companies, including Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), have been instructed to prepare plans for creating additional storage capacity beyond regular commercial inventories.
Impact of West Asia Conflict
The move comes after the conflict in West Asia disrupted global energy supplies. India faced disruptions in supplies from the Gulf region, which accounts for around 40 percent of the country's crude oil imports, 65 percent of natural gas supplies, and 90 percent of LPG imports.
While alternative arrangements were made for crude oil and natural gas supplies, LPG availability was impacted, leading to regulated supplies for commercial consumers. Sharma noted that India is also working on expanding crude oil storage capacity, though she did not provide further details.
Adequate Stocks and Production
The government maintained that the country currently has adequate stocks of petrol, diesel, LPG, crude oil, and natural gas. Refineries are operating at optimum levels, and LPG production has reached an all-time high of around 52,000 tonnes per day.
"No dry out reported at any LPG distributorship," Sharma said, adding that "abnormal sale is being observed at many petrol pumps."
Fuel Sales Trends
According to Sharma, higher fuel sales are being driven by agricultural demand and a shift by consumers from private retailers and bulk suppliers to state-run outlets due to price differences. More than 150 districts have recorded over 30 percent growth in petrol sales, with 14 districts reporting sales that have more than doubled. Diesel sales have risen over 30 percent in 156 districts, while six districts have seen growth exceeding 100 percent.
Sharma said sales by private fuel retailers have fallen 38 percent for diesel, while bulk diesel sales by state-run oil marketing companies have declined 29 percent.
Pricing and Market Dynamics
Petrol and diesel sold through retail outlets of state-owned companies continue to be priced below cost, while bulk consumers such as telecom towers are charged market rates. Private retailers have also raised fuel prices more sharply than public sector companies. IOC, BPCL, and HPCL, which together control about 90 percent of the fuel retail market, have increased petrol and diesel prices by around Rs 7.50 per litre since May 15.
Government Measures
The government is reviewing the situation and has advised states and Union territories to form special squads to check hoarding and black marketing. Consumers have also been urged to avoid panic buying and purchase fuel only through authorised channels.
