India monitors fuel supplies amid panic buying; prices hiked again

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The government on Monday said it is closely monitoring fuel supplies across the country and taking immediate corrective measures to prevent shortages, amid panic buying and dryouts reported at petrol pumps in parts of Gujarat, Maharashtra and Uttar Pradesh. Sujata Sharma, joint secretary in the ministry of petroleum and natural gas, said India has sufficient stocks of petrol, diesel and domestic cooking gas LPG and stressed that supply disruptions at some retail outlets were caused mainly by a sudden surge in demand and logistical constraints.

“All retail outlets are being closely monitored at the level of oil marketing companies and the petroleum ministry... supply situation is being closely monitored to immediately address any intermittent dryouts and to replenish stocks of petrol and diesel at all retail outlets,” Sharma said. “The country has a sufficient supply of LPG, petrol and diesel,” she added.

Panic buying, higher demand behind dryouts

Sharma said some regions witnessed a 20-30 per cent jump in fuel demand due to increased agricultural consumption, bulk purchases and consumers shifting from private fuel stations to public sector outlets because of lower prices. As per news agency PTI, private fuel retailers were selling petrol and diesel at rates at least Rs 5 and Rs 3 per litre higher, respectively, than state-run oil marketing companies, leading to higher pressure on PSU retail outlets.

Explaining the situation, Sharma said petrol pumps generally maintain stocks sufficient for two to three days. “When there is a sudden growth of 20-30 per cent, there could be some difficulty due to last-mile constraints in immediately moving stocks,” she said. “It isn't that depots and terminals do not have sufficient stocks, but last-mile constraints lead to some difficulty.”

The ministry said state governments have also been asked to monitor local supply situations and prevent hoarding or mismanagement.

Fuel prices raised four times since May 15

The remarks came hours after petrol and diesel prices were increased for the fourth time in less than two weeks. Petrol prices were hiked by Rs 2.61 per litre and diesel by Rs 2.71 per litre on Monday, taking the cumulative increase since May 15 to nearly Rs 7.5 per litre. In Delhi, petrol prices rose to Rs 102.12 per litre, while diesel climbed to Rs 95.20 per litre.

Global crude oil prices had surged over 50 per cent since late February due to the Iran conflict and disruptions in shipping through the Strait of Hormuz, a key global oil transit route. Despite recent price hikes, Sharma said state-run oil marketing companies were still incurring losses of nearly Rs 600 crore per day, down from around Rs 1,000 crore before May 15.

Govt asks people to conserve fuel

Sharma urged consumers to avoid panic buying and conserve fuel wherever possible. She advised people to shift to alternatives such as piped natural gas and induction cookers to reduce dependence on conventional fuels.

The official also said the ongoing West Asia crisis had affected nearly 40 per cent of India’s crude oil imports, 90 per cent of LPG imports and 65 per cent of natural gas imports. However, she noted that India was sourcing crude oil from alternative suppliers and had ramped up LPG production at refineries to nearly 50,000 tonnes per day to maintain domestic supply.

Prime Minister Narendra Modi recently urged citizens and government departments to conserve fuel, reduce non-essential travel and encourage remote working amid rising energy costs and pressure on foreign exchange reserves.