Production of petrol, diesel sufficient to take care of demand surge: Govt

Sufficient supplies of petrol and diesel are being made available to cater to the extra demand, says Ministry of Petroleum & Natural Gas

Production of petrol and diesel in the country is more than sufficient to take care of any demand surge, said government on Wednesday.

Sufficient supplies of petrol and diesel are being made available to cater to the extra demand, said Ministry of Petroleum & Natural Gas.

In the past few days, some areas have reported a big increase in instances of rush at the PSU retail outlets, leading to delays and increased waiting time for customers. This has, in turn, led to speculation of supply constraints by the public sector oil marketing companies, said government.

"It is a fact that at specific locations in some states, there has been a significant increase in demand for petrol and diesel, with an increase being as high as 50% during the first half of June 2022 over corresponding period of last year. In particular, this has been noticed in Rajasthan, Madhya Pradesh and Karnataka. These are states where large quantity of supply was being done by retail outlets belonging to private marketing companies and where the distances from supply locations i.e. terminals and depots are longer," the ministry added.

In general, the increase in demand has been on account of the seasonal surge in demand due to agricultural activities, bulk buyers having shifted their purchases to retail outlets (ROs), and a substantial reduction in the sales by private marketing companies with their substantial volumes having shifted to PSU ROs. Simultaneously, as a result of a crackdown by the government on illegal bio-diesel sales, these volumes have also been added to the RO Diesel sale, said the ministry.

"The production of petrol and diesel in the country is more than sufficient to take care of any demand surge. This unprecedented growth has created some temporary logistics issues at the local level. Oil companies have geared up to tackle these issues by increasing the stocks at the depots and terminals; extra movement of tank trucks and lorries to serve the retail outlets; extended working hours of depots and terminals including at night, to cater to the extra demand, and provision of extra quantities of fuels for supply in the affected states," said the ministry.

Government said the companies are ensuring that sufficient supplies of petrol and diesel are available to cater to this extra demand, and they are committed to fulfill the energy needs of the nation.

India's petrol consumption jumped by 54% and that of diesel soared by 48% in the first fortnight of June from a year earlier with continuing demand recovery from a relatively low base in 2021 when the world's third-biggest oil user was in the grip of the second wave of COVID-19, reported PTI on Wednesday.

Petrol sales by state-owned fuel retailers, which control roughly 90% of the market, at 1.28 million tonnes between June 1 and 14 was 54.2% higher than the same period last year when a devastating second COVID-19 wave wreaked havoc on the economy.

This consumption was 48.2% higher than the demand in the first fortnight of June 2020 and 25% more than the 1.02 million tonnes of sales in the pre-COVID June 2019. Month-on-month sales were up 0.8%, preliminary industry data showed on Wednesday.

Diesel, the most-used fuel in the country, saw sales jumping 47.8% year-on-year to 3.4 million tonnes between June 1-14. This was 37.3% higher than the corresponding period of June 2020 and 20.3% more than the pre-COVID 2019 period. It was 12% higher than the 3.03 million tonnes of consumption during May 1-14 this year.

Industry sources said consumption in June was higher because demand returned after high prices in the previous month impacted sales. Also aiding the demand was the start of the harvesting season.