Fuel demand, particularly of diesel, is seeing a surge in certain pockets as a large number of bulk fuel consumers have shifted to public sector oil marketing companies’ (OMCs) retail outlets due to a wide price gap between retail prices—which are still below market rates—and the market-linked bulk prices, according to the government. On top of that, certain private sector fuel retailers are retailing the fuels at higher prices than the OMCs, leading to additional pressure on the latter’s retail network as consumers are preferring to buy from them.These shifts are a major reason why the OMCs’ retail outlets in some areas are running out of fuel stocks faster than usual, leading to dry-out-like situations, according to industry sources. There have been reports from various parts of the country of some retail fuel bunks running out of stocks. Industry sources said that the problem gets amplified when a supply constraint at one retail outlet leads to rumours of shortage in the area, and consumers start panic-buying from other outlets as well.The visible migration of a large number of bulk consumers to OMCs’ retail stations, combined with higher agricultural season fuel demand, has led to a demand growth of 20% to 30% in some localised areas, according to Petroleum Ministry Joint Secretary Sujata Sharma. “The price difference between diesel for bulk sales and that available at petrol pumps is Rs 40-42 per litre,” she said.Also Read | Petrol, diesel prices hiked by 90 paise per litre, 2nd increase in under a week as OMCs continue to bleedAmid the global oil and fuel price surge due to the West Asia crisis, only a fraction of the price hike has been passed on for the retail petrol and diesel sales in India by the OMCs; the price hikes have been much higher in the bulk and industrial segments. While the OMCs, being government-owned, have kept prices artificially lower, some private sector fuel retailers have hiked retail fuel prices. The three OMCs—Indian Oil, Bharat Petroleum, Hindustan Petroleum—together have a share of 90% in the fuel retail market.While fuel production and supply at the national level remains stable and adequate, these factors are leading to regional imbalances and last-mile logistical challenges for the OMCs to maintain 24×7 supplies, particularly in tier-2 and tier-3 cities, and rural and remote areas. While retail fuel pumps usually sell fuel to two-wheelers and cars, bulk and commercial buyers like state road transport corporation buses, truckers, and diesel-powered telecom towers are supposed to get their supplies from designated points.“Petrol pumps generally have stocks of two to three days, and if they see 20-30% growth in demand, they may temporarily face some issues…after all, there are last-mile logistics issues (as well),” Sharma said, adding that the OMCs are closely monitoring the situation on a real-time basis and taking the necessary action. Some state and district administrations have also issued formal requests or directives for bulk consumers to use designated bulk supply points rather than retail petrol pumps.The country’s second-largest fuel retailer Bharat Petroleum said that while metropolitan centres continue to remain adequately supplied, special operational focus has been placed on “maintaining seamless supplies across tier-2, tier-3 and remote markets, where localised demand spikes and precautionary buying tendencies have been observed in recent days”.Story continues below this adAccording to Bharat Petroleum, between May 1 and May 20, its petrol sales volumes jumped 16.4% year-on-year, while diesel sales surged 16.7%, reflecting super-normal growth. According to provisional data from the Petroleum Ministry, nationwide petrol consumption in April was higher by 6.4% on a year-on-year basis, while diesel consumption was 0.3% higher.“BPCL’s (Bharat Petroleum’s) integrated supply chain network — comprising refineries, terminals, depots, transport logistics and retail outlets — continues to operate efficiently, supported by round-the-clock monitoring and enhanced coordination between regional teams and field operations,” Bharat Petroleum said, adding that additional measures have been initiated to augment supplies in high-demand regions.These measures include enhanced tanker movement planning, depot-level inventory optimisation, and continuous monitoring of retail outlet replenishment cycles. The other two OMCs have also implemented similar measures, it is learnt.The government and the OMCs reiterated that India has more than required production of petrol and diesel, and appealed to consumers to not indulge in panic buying. “There is no issue in product supply,” Sharma said. “I would again appeal that citizens should not resort to panic buying and should not believe rumours. They should purchase as per the need,” Sharma said, adding that India produces about 10 million tonnes a month, but consumes about 8.5 million tonnes.Story continues below this ad“We have sufficient supplies of crude oil, natural gas, petrol and diesel…Our refineries are operating at optimum capacity (105% in the last year) to meet the demand of the country,” Sharma said. India is the world’s fourth-largest refiner, and while it majorly depends on imported crude, it is a net exporter of refiner fuels as the refining capacity exceeds domestic consumption. “To say that there is a shortfall of petrol and diesel at any place is incorrect,” Sharma said.