Petroleum dealers blame institutional procurement for fuel crisis

The Consortium of Indian Petroleum Dealers (CIPD) has squarely blamed the institutional procurement of High Speed Diesel (HSD) for causing prolonged queueing and unexpected chaos at the retail outlets. The trend became obvious in the wake of the logistical constraints linked to the Strait of Hormuz and the ordeal faced by the public at the retail outlets.

The outlets belonging to the Government Oil Marketing Companies (OMCs) witnessed unusually high HSD sale volumes compared to their historical averages recently. Though the increased sale, on the face of it, appeared positive, the dealers faced severe operational and supply-related challenges across the country.

In a representation submitted to the Centre, the CIPD blamed the institutional and industrial consumers for procuring HSD fuel directly from the retail outlets of the OMCs instead of lifting fuel through the institutional supply channels and terminals, the traditional sourcing channels.

“The shift happened as the HSD supplied through terminals and bulk business divisions is costlier, and hence its purchase from retail outlets. This led to artificial inflation of sales average in retail outlets, distortion in supply planning and restriction of fuel loads”, observes the CIPD Treasurer Chandu, who is also the President of Anantapur District IOC Limited Dealers Association.

The abnormal shift could have also led to the change in pricing patterns, he pointed out, while appealing to the government to ensure that the institutional procurement is done only through the designated channels.