Fuel shortages due to bulk users buying from retail outlets, says dealers’ association

BENGALURU: In view of the ongoing conflict situation in the Middle East, oil marketing companies (OMCs) has resorted to supplying petrol and diesel to bunks based on last year’s average. As per the new rules, the OMCs are calculating how much was supplied in the same month last year and supplying accordingly. This, along with bulk users buying from bunks, has led to shortages across several petrol bunks across the city.

The Indian Oil Petroleum Dealers Association has complained to PM Modi that industries that were making institutional purchases until now are forced to buy from respective bunks due to the price hike. Industries now have to pay Rs 150 per litre of diesel and are hence turning to retail bunks. This has led to shortages at petrol bunks.

The Indian Oil Petroleum Dealers Association has written to the Prime Minister’s Office highlighting that the industrial sector which used to buy directly from companies in bulk, have stopped bulk orders and are buying oil from petrol bunks. Due to this, a fuel shortage has arisen, it pointed out and requested the central government to take appropriate action.

In the representation submitted to the Principal Secretary to the Prime Minister’s Office, New Delhi, the association stated that many industrial and institutional consumers across the country are directly purchasing their high speed diesel (HSD) requirements from government OMC retail petrol bunks instead of designated institutional and bulk supply channels. According to the representation, the main reason for this shift is the difference between institutional bulk supply rates and retail petrol bunk rates, which has led to largescale diversion of industrial-level purchases to retail bunks.

The association expressed concern that this situation has caused serious operational, supply chain, and stock management problems for petrol bunk dealers across the country.

Key issues:

Artificial increase in retail sales averages

Disruption in fuel supply planning and logistics

Reduction and restrictions in fuel supply from OMCs

Increase in ‘No Stock’ situations at petrol bunks

Inconvenience to genuine retail customers

Pressure on tanker movement and supply instability

Financial and operational uncertainty for dealers

Further, the association mentioned that fuel supply to many petrol bunks is being restricted on the grounds that sales volumes have exceeded historical averages. However, the association clarified that the main reason for this increase is institutional customers purchasing from retail bunks.

In this context, the association has requested the Prime Minister’s Office and the Ministry of Petroleum and Natural Gas to conduct a comprehensive review involving all government and private OMCs across the country.

Suggestions of Association

Details of industrial and institutional HSD users across the country

Past consumption and purchase patterns

Extent of diversion of purchases from institutional supply channels to retail bunks

Comparison of bulk and retail supply rates

Region-wise details of abnormal HSD retail sales increases

In addition, the association has requested the government to implement appropriate regulatory and policy measures to ensure that industrial and institutional customers purchase their regular HSD requirements through designated bulk and institutional supply channels instead of relying on public retail petrol bunks.

The association expressed confidence that prompt and appropriate intervention by the government will restore normalcy to the retail sales system, reduce stock shortages, improve fuel logistics, and ensure uninterrupted fuel availability to genuine customers across the country.

The association expressed hope that the Prime Minister’s Office will consider this matter seriously in the interest of the country and public welfare and take suitable corrective measures at the earliest.