Surge in Fuel Demand as Diesel Consumers Shift to Retail Pumps
Rising Fuel Demand in India
Representational image of trucks parked along a highway roadside. (Photo: AT)
New Delhi, May 21: A notable increase in fuel demand has been observed across various regions in India, attributed to a significant price disparity of Rs 40-42 per litre, which has prompted bulk diesel users to purchase fuel from retail petrol stations, as stated by Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas.
Sharma noted that some petrol stations are experiencing a demand surge of 20-30%, influenced by the current agricultural season and bulk consumers opting for retail outlets instead of traditional suppliers.
This unexpected rise in demand has led to shortages at certain petrol stations in specific areas.
“The current price gap between diesel sold through bulk channels and that available at retail outlets is approximately Rs 40-42 per litre,” Sharma explained.
While petrol stations cater to vehicles like cars and two-wheelers, bulk consumers, including state-run buses and telecom towers utilizing diesel for power generation, are expected to procure fuel from bulk supply points.
Fuel prices at petrol stations are currently below cost, whereas bulk supplies are sold at market rates.
Sharma also mentioned that state-run fuel stations are witnessing increased demand due to their lower prices compared to private retailers.
"Typically, petrol stations maintain a stock for two to three days, and a 20-30% increase in demand may lead to temporary challenges... especially considering last-mile logistics issues in fuel delivery," she added.
The government is actively monitoring supply levels at outlets experiencing unusually high demand and is coordinating with local authorities and police as necessary.
"There is no issue with product supply. I urge citizens to avoid panic buying and to purchase fuel according to their actual needs," Sharma advised.
These remarks come amid worries regarding fuel supplies due to disruptions linked to the West Asia crisis. "The Indian government has implemented all feasible measures to minimize inconvenience for the public," Sharma reassured.
India has adequate reserves of crude oil, petrol, diesel, and LPG, with refineries operating at optimal capacity to satisfy domestic requirements, she stated.
Sharma highlighted that India's monthly diesel production is around 10 million tonnes, while consumption is approximately 8.5 million tonnes.
Regarding cooking gas, she mentioned that the government has increased domestic LPG production to counteract disruptions caused by the West Asia crisis.
"As an import-dependent nation, 60% of our LPG demand is met through imports, with 90% of that coming via the Strait of Hormuz," which is currently affected by the West Asia conflict, she noted.
Sharma indicated that refineries have boosted LPG output by reallocating streams previously designated for petrochemical production. "Refineries are now producing between 46,000 and 47,000 tonnes of LPG daily," she added.
Additionally, she mentioned that the government has previously compensated state-run oil marketing companies for losses incurred from subsidized LPG sales.
"In 2023, Rs 22,000 crore was allocated, and Rs 30,000 crore was provided the previous year," Sharma stated. "The Indian government has supported OMCs when necessary."