Why are some states facing fuel shortages?
Dealer associations in states including Rajasthan, Madhya Pradesh, Gujarat and Tamil Nadu have reported shortages, as many private fuel pumps have closed or reduced sales. The government says users switching from them to state-run retailers has boosted demand, causing a temporary logistical problem. The oil ministry also attributed the increase to a 50 percent increase in demand year-on-year in June. During the same period last year, demand was very low due to covid-19. However, pump companies say the main reason for the crisis is a lack of supply. In addition, the farm’s demand for diesel increased with the start of seeding.
Why are some states more affected?
The countries hardest hit by the shortage are those that rely heavily on pumps from private companies, which have closed or reduced fuel sales. In Rajasthan, fuel retail stores run by private companies meet 15-17% of fuel needs. Of the state’s 6,475 pumps, 1,275 are privately owned. Similarly, private companies own 500 of the 4,900 pumps in Madhya Pradesh. Relatively higher reliance on pumps by private companies has led to shortages in the affected states, while others have been mostly unaffected.
Is the fuel shortage a cause for concern?
It may not be a major cause for concern. The government has said that the country has enough fuel to meet the country’s growing energy demand. India’s crude oil imports have also increased towards the end of the year. However, the prolonged shutdown of pumps by private fuel retailers could increase demand for the storage facilities of state oil companies.
How long will the demand pressure last?
Gas pump associations say the situation now appears to be easing as supplies increase. However, normalization on all areas may take some time. According to the Rajasthan Petroleum Dealers Association, supplies are now sufficient in Jaipur, but rural pumps are struggling. Suneet Bagai, the association’s president, said supply from HPCL is expected to hit on Sunday as it normally transfers fuel through pipelines. However, this pressure is expected to persist for the next 20 days until kharif seeding ends.
What is being done to alleviate the situation?
The Oil and Gas Department said oil and gas companies are prepared to address these problems by increasing inventories at warehouses and ports. They have deployed more trucks to service retail locations and warehouses, and stations have had to extend their working hours into the night to accommodate the increased demand. Oil marketing companies have also introduced provisions to provide more fuel in the affected states. State-run oil marketing companies have made sure there are enough products and supplies on their networks.
