Petrol, diesel crisis looming in several states, courtesy increased VAT, fluctuating dollar price

According to the Petroleum Dealers Welfare Association, more than 60 to 70 percent of the total 4000 petrol pumps are on the verge of running out of stock.

Hyderabad (Telangana): Erratic supply from the public sector oil companies to the dealers, coupled with increased VAT (Value Added Tax) by states, have led to a sudden crisis in the supply of petrol and diesel in several states across the nation. The fuel pump owners and the dealers’ association apprehend that if the problem is not addressed immediately, the crisis might have a prolonged effect.

Information trickling in from different parts of the country shows that the crisis in the oil is not restricted to a limited sphere but is having a wide-ranging effect on several petrol pumps across the country. On Monday, 12 out of 152 petrol pumps in Bhopal dried up. The fuel crunch affected pumps not only in the city but also those outside the city limits including ones in Kokta Transport Nagar, Neelbad, and Berasia areas.

The same was the condition in Himachal Pradesh. Many of the 496 petrol pumps had to shut down or ration their supply because of the crisis. According to the Food Supply Department of Himachal Pradesh, an average of 240 metric tonnes of petrol and 1300 metric tonnes of diesel are consumed daily in the state. According to sources, IOCL (Indian Oil Corporation Limited) supplies 50 percent of the total consumption in the entire state followed by BPCL (Bharat Petroleum Corporation Limited) and HPCL (Hindustan Petroleum Corporation Limited), each contributing 24 percent of the total supplies. Only 2 percent is supplied by private companies.

In Rajasthan, nearly 2500 petrol pumps are managed by HPCL and BPCL together, but in the last few days, more than 2000 of these pumps have arrived on the verge of drying up. Though supply is running fine in the 4000 pumps of IOCL, there is fear that these pumps might not be able to cope with increasing demand inside the state. There is also a shortage of petrol and diesel in Haryana.

According to the Petroleum Dealers Welfare Association, more than 60 to 70 percent of the total 4000 petrol pumps are on the verge of running out of stock. Fears subsequently have started to mount, with a chance of other sectors taking a severe hit in case the supply lines are not revived immediately. "In Haryana, there is a need for 80 to 90 lakh litres of diesel per day, while 15 to 17 lakh litres of petrol is consumed daily. The supply of petrol has been affected more than diesel. Due to which there may be a huge shortage of petrol in the coming days", President of the State’s Oil Association Sanjeev Chaudhary said.

Though representatives from the Oil and Natural Gas Ministry were not ready to say anything officially, senior officers told ETV Bharat on the condition of anonymity that the sudden rise in dollar prices has increased the price of crude oil in the international market, resulting in public sector oil companies being forced to put a sanction on the supply of oil to the dealers, and thus causing the crisis. "We believe that this is a temporary phase as things will again become normal in a short time," the official said.

The effect of the crisis was not only in North India, but also had its impressions on the Southern and Eastern parts of the country. In the East, though there was no shortage reported from Jharkhand and West Bengal, Bihar has started to feel the heat. There was a shortage of supply reported from several districts in Bihar including Munger, Begusarai, Khagaria, and Lakhisarai.

"Oil companies are only giving the sanction of the oil that was consumed by the petrol pumps previously. Any additional requirement is not entertained. Naturally, the pumps have to rearrange their supply mechanism accordingly. The pumps, in present circumstances, are in no position to cater to any additional needs. For the last 15 to 20 days, the oil companies have not entertained any additional requirements. They are only following the previous log book. This is because of the sudden rise in crude oil prices in the international market. Moreover, many states have increased VAT so this is also having an effect on the price of petrol and diesel,” President of All India Petroleum Dealers Association Ajay Bansal said, adding that the situation in Delhi is normal and there is no shortage of supply in the capital at present.