Govt Bans Bulk Users From Petrol Pumps, Caps Daily Diesel Sales at 200 Litres
The differential arose as state-owned oil companies modulated retail prices to insulate common users from the spike in cost that followed the West Asia crisis in late February. While bulk users such as telecom towers and industries using diesel for power generation and other feedstock needs are charged market price, the retail pump rates are way lower than cost.
New Delhi: The government on Friday restricted industrial, commercial and institutional users from buying petrol and diesel from retail pumps, directing them instead to procure fuel from bulk sale points. It also capped diesel sales to a vehicle in a day at 200 litres per customer or vehicle per day in order to prevent local shortages amid global supply disruption. The restrictions will remain in force for an initial period of up to 90 days and may be extended through a fresh government order, according to the government.
The move of the government comes after observing the fact that many institutional, industrial and commercial consumers are reportedly procuring petrol and diesel from retail fuel stations. “The bulk procurement through retail stations could divert supplies intended for ordinary consumers and create the potential for localised shortages and disruption of essential services to the common man. In a bid to stop this practice, the government took such a step to prevent hoarding from the system and at the same time it will help avail sufficient fuel for the needy,” said an official source.
According to an official order, the government has said that retail outlets can sell diesel only into a vehicle tank or petroleum and explosives safety organisation or PESO-approved container, and not more than 200 litres per customer or vehicle per day. “Also, industrial, commercial and institutional consumers will no longer be allowed to buy petrol or diesel from retail outlets. They will be required to source their requirements through their own consumer pumps or bulk sale channels,” the ministry of petroleum and natural gas said in a notification.
The restrictions, which will be in place for up to 90 days as per the notification, follows abnormal demand growth, particularly that of diesel, in some pockets after bulk users started buying fuel from petrol pumps due to the pricing difference. While diesel at petrol pumps costs Rs 95.20 a litre in Delhi, bulk sales are priced at Rs 134.50.
The differential arose as state-owned oil companies modulated retail prices to insulate common users from the spike in cost that followed the West Asia crisis in late February. While bulk users such as telecom towers and industries using diesel for power generation and other feedstock needs are charged market price, the retail pump rates are way lower than cost.
Commercial customers like trucking companies and state road transport buses, too, had been tapping pumps for their needs, resulting in abnormal rise in demand in some pockets. The price differential has also led to a shift in sales pattern with volumes shifting to PSU petrol pumps from private sector outlets that priced petrol and diesel at higher rates.
The ministry further said that the current prevailing geo-political situation affecting certain regions of the world had affected international petroleum supply chains, shipping logistics and the availability of petroleum products. “It has been observed in current situation that abnormal increases in sales of motor spirit (petrol) and high speed diesel (diesel) through retail outlets in certain parts of the country are driven by shifting of industrial, commercial and institutional consumers to Retail Outlets owing to the price difference between retail and bulk sale prices,” the notification said.
The directive, however, empowers public-sector oil marketing companies (OMCs) and other authorised fuel retailers to enforce the restrictions and requires state governments and Union Territories to take action against hoarding, black marketing, unauthorised procurement and diversion of fuel supplies. “Any restrictions imposed under the new framework can remain in force for an initial period of up to 90 days and may be extended through a fresh government order,” the government said in its order.
