The government has barred industrial, commercial and institutional users from buying petrol and diesel in bulk from retail outlets. According to an official order, the restriction will be in place for up to 90 days and has been imposed after some retail outlets reported abnormal demand growth, particularly for diesel. According to reports, the surge in demand from bulk users came due to the pricing difference. While diesel at petrol pumps costs Rs 95.20 a litre in Delhi, bulk sales are priced at Rs 134.50. The government has asked these buyers to source their requirements from bulk sale points.
Bulk users are charged the market price
While bulk users such as telecom towers and industries using diesel for power generation and other feedstock needs are charged market price, the retail pump rates are way lower than the cost. The price difference is due to state-owned oil companies modulating retail prices to provide common users some relief from the surge in crude oil costs due to ongoing tensions in West Asia, which started in late February.
The government said the move was necessitated by the "current prevailing geopolitical situation affecting certain regions of the world" that has adversely impacted international petroleum supply chains, shipping logistics and the availability of petroleum products.
"It has been observed in current situation that abnormal increases in sales of Motor Spirit (petrol) and High Speed Diesel (diesel) through Retail Outlets in certain parts of the country are driven by shifting of industrial, commercial and institutional consumers to Retail Outlets owing to the price difference between retail and bulk sale prices," the notification said.
Purchased capped at 200 litres
The notification also restricts diesel sales at retail outlets to vehicle fuel tanks or Petroleum and Explosives Safety Organisation (PESO)-approved containers, with purchases capped at 200 litres per customer or vehicle per day.
"The Government may by a special order exempt any consumer, class of consumers, area, transaction, or category of transactions from all or any of the provisions of this Order," the notification said adding any violation shall be punishable in accordance with the provisions of the Essential Commodities Act.
What does it mean?
The order empowers public-sector oil marketing companies and other authorised fuel retailers to enforce the restrictions and requires state governments and union territories to take action against hoarding, black marketing, unauthorised procurement and diversion of fuel supplies.
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