Fuel supply eases, exposes shortcomings

With public sector oil companies continuing to pump in additional stocks, the rush for fuel in Hyderabad showed on Thursday signs of abating after almost two days but not before bringing to the fore certain practices and limitations.

Though oil companies and government attributed the rush to panic buying by customers, those in the know said discontinuation of supplies by the former on credit to dealers and the trade practice of promoting sales by extending credit to bulk buyers played a major role.

Be it the Covid pandemic, the Russia-Ukraine war or the nearly month old war in West Asia, the oil companies during crises in recent years not only stopped supplying products on credit to the dealers but also insisted on the settlement of the dues, Telangana Petroleum Dealers Association president M. Amarender Reddy said.

Payment in advance is the norm now, he said, explaining that the change makes it difficult for dealers, especially considering that a portion of the diesel sales, to bulk consumers such as truckers, construction companies and even cab firms is on credit. For dealers, credit sales is a way to boost volumes sales though not all the customers end up clearing the dues within the unwritten 15 days that is agreed initially. About 40% of total diesel sales will be on credit, he said, adding petrol is always dispensed on a cash and carry basis.

A senior official in the oil industry said the three oil marketing companies, namely IOC, BPCL and HPCL, have their own financial arrangements with their dealers and which may keep differing from time to time and depending on the situation. So that cannot be cited as a reason by the dealers.

Moreover, during the pre-crisis period (West Asia war) and now there is nothing that has changed, the official, who requested anonymity, said, adding the situation with regard to product availability has improved.

By the weekend, “we will be just catching flies in the outlets. There is absolutely no supply shortage,” he said, adding unlike LPG, the visibility of automobile fuel network is higher and to that extent anything unusual gets amplified faster.

In an update on the fuel supply status, as of March 25, the Civil Supplies Department on Thursday said against an average daily supply of 5,883 kilolitre of petrol, 10,799.5 KL was supplied in the State. For diesel, the average daily supply is 7,348 KL, while the supply made totalled 11,327.5 KL.

The 22,127 KL fuel supplied far exceeded the daily average of 13,231 KL. The State has ramped up its fuel reserves, dispatching nearly double the average daily requirement to ensure no disruption in services, the Department said, assuring there is an abundant and secure supply of petrol, diesel, and domestic LPG cylinders across the State. The supply chains are being continuously monitored to ensure robust and adequate stocks at all outlets to meet daily needs, it said.