The government on Wednesday said that the production of petrol and diesel are “sufficient” to take care of any demand surge as the dealers across the country have been complaining about shortage of the key transport fuels.

The response from the Ministry of Petroleum & Gas (MoPNG) comes after reports emerged from petrol pump dealers, particularly of Hindustan Petroleum Corporationand Bharat Petroleum Corporation , across the states complaining about drastic curtailment of supplies despite payments being made in advance. Dealers also claimed that private OMCs too were curtailing supplies due to huge under recoveries.

“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. Oil companies are geared up to tackle these issues by increasing the stocks at depots and terminals,” MoPNG said in a statement.

The statement added that provisions are also made to move extra tank trucks and lorries to serve the retail outlets, extended working hours of depots and terminals including at night to meet additional demand, and made provisions for more supplies in the affected states.

The Ministry assured that the companies are committed ensuring availability of sufficient auto fuels supplies to meet extra demand,, the Ministry assured.

Increasing demand

“In the past few days, some areas have reported a big increase at PSU Retail Outlets, leading to delays and increased waiting time for customers. This has, in turn, led to speculation of supply constraints by the PSU OMCs

At specific locations in some states, there has been a significant increase in demand for petrol and diesel 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. In these states, large quantities of supplies were managed by retail outets belonging to private OMCs, where the distances from supply locations, terminals and depots are longer, the ministry explained.

The increase in demand has been due to seasonal surge on account of agricultural activities. Besides, the bulk buyers shifted their purchases to PSU retail outlets due tosubstantial reduction in the sales by private OMCs Simultaneously, as a result of crackdown by the government on illegal bio-diesel sales, these volumes added to the RO Diesel sale, it added.

Instruction to dealers

Industry sources said that PSU OMCs told them that due to increasing losses, it has been decided that depots will now run at much less than its full capacity. There is a quota fixed for petrol and diesel, after which supply will be stopped.

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