New Delhi: The government will ask private fuel retailers not to restrict sales of petrol or diesel, Oil Secretary Dr Neeraj Mittal said on Thursday. The remarks came after Jio-bp and Nayara Energy put purchase limits in place at some of their outlets. Bulk fuel buyers have been turning to regular petrol pumps to stock up on diesel, which is now much cheaper at retail than through bulk channels which have tracked international crude oil prices closely.
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"Nobody is allowed to cap fuel sales. It is not acceptable; it is not done," Mittal told reporters, adding that the government's position had not changed.
He also pointed to directions the companies had already received. "In the past, letters had been issued; instructions had been issued to them (for restricting fuel sales). There is no change in the government view on this," he said.
Oil Minister Hardeep Singh Puri said his ministry is "in touch" with the private fuel retailers.
The two private retailers brought in the limits at some outlets last month. At some Jio-bp stations, customers can buy no more than 50 litres of diesel a day. At Nayara Energy stations, the limits range from 70 litres to 200 litres.
The caps followed a rise in bulk users buying diesel meant for retail customers. These buyers include factories, telecom companies, hotels, hospitals and other bulk consumers. Some industrial users are buying 400 to 600 litres at a time from retail outlets, far more than individual motorists usually buy.
Jio-bp is a joint venture between Reliance Industries and Britain's bp. Earlier this week, it said all its mobility stations were operational and adequately stocked. "Given the prevailing demand dynamics, we are taking appropriate measures to ensure equitable availability of fuel for mobility and transportation needs, particularly in view of demand from industrial and other non-transport use," a company spokesperson had said.
Nayara Energy said it continued to maintain fuel supplies across its nationwide dealer network. The company said it was focused on ensuring optimum supplies to more than 7,000 stations and other channels, including bulk customers.
The rush comes from a split in pricing that has grown since May. Retail petrol and diesel prices have not changed since then, even as international crude prices have climbed. Prices for industrial and other bulk consumers follow international market rates more closely, so they have risen more sharply.
People in the industry said this has opened a gap of as much as Rs 50 a litre between retail and bulk diesel. With that much at stake, some large consumers have started buying diesel at retail stations instead of dedicated outlets.
On paper, petrol and diesel prices are market-linked. In practice, retail prices have often not moved immediately or fully with international crude prices. State-controlled fuel retailers have also traditionally moved pump prices together, particularly when revising them.
According to industry sources, the shift is putting pressure on inventories at individual petrol pumps. Each station has limited storage capacity, and restocking it through the fuel supply chain can take at least a couple of days.
As long as the price gap rewards industrial consumers for moving from bulk channels to retail outlets, pumps that mainly serve motorists risk running dry. If the differential continues, that pressure could keep exposing a structural mismatch between retail and bulk fuel pricing. A retailer might have fuel available elsewhere in its supply network while some of its individual stations run short because of unusually large purchases.
