The government has prohibited petrol pumps from selling auto fuel to bulk users and capped diesel sale to 200 litres per vehicle in a day to check state-run oil companies’ revenue losses even as the international price of crude fell to below $86 a barrel on Friday, amid hopes for a US-Iran peace deal.
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Invoking the Essential Commodities Act (ECA) on June 11, a government order forbade industrial and commercial customers from procuring petrol or diesel from retail outlets (ROs) and directed them to meet their fuel requirements from their own consumer pumps. Bulk users include state governments’ transport undertakings, IT parks, malls, industrial units and defence units.
Diesel sale is particularly rationed. “Retail Outlet dealers shall dispense HSD [high speed diesel or diesel] only in a vehicle tank, or PESO-approved containers, and not exceeding 200 litres in a day to a customer/vehicle and this HSD cannot be resold,” the notification said.
The order that came into effect immediately, is issued for a maximum of three months.
Officials and executives of state-run oil marketing companies (OMCs), said on condition of anonymity that the move is to ensure availability of petrol and diesel to genuine customers and to check diversion of auto fuels because of huge rate difference between pump price and bulk-sale price. Diesel, which is priced at ₹95.20 per litre Delhi pumps, it is priced at ₹134.50 a litre in bulk.
While bulk sale of petrol is limited, it is about ₹3-6 per litre costlier in pumps run by private firms. As on June 8, when international benchmark Brent crude was at $97.25 a barrel, state-run OMCs were losing ₹6 per litre revenue on petrol and ₹30 on diesel.
The news of a possible truce, however, saw Brent softening to $85.89 per barrel during intraday trades, an over-28% fall from the peak of nearly $120 a barrel on March 9.
This is latest in the series of measures the government took to ensure regular supply of fuel – petrol, diesel, and cooking gas to citizens despite massive supply-chain disruptions since the war broke out in West Asia on February 28. Some of the measures included priority supply of liquified petroleum gas (LPG) to over 330 million households by rationing sale to commercial entities and excise duty exemption on ethanol for up to 30% blending with petrol (E30).
India, which imports over 88% crude oil it processes and pays in dollars, has also intensified exploration and production (E&P) works in domestic sedimentary basins.
After an intervention of home minister Amit Shah, a decades-long inter-state deadlock between Nagaland and Assam over oil and gas exploration blocks has been resolved.
In the presence of Shah, a tripartite memorandum of understanding has been signed involving the central government, and states of Assam and Nagaland for facilitating mineral oil operations.
“Both states decided that they would not allow any obstacle to India’s oil exploration but will advance on the path of mutual cooperation, as these resources constitute national wealth,” a government statement said.
