No fuel sale caps allowed, Government to tell private retailers

The Government will ask private fuel retailers not to restrict sales of petrol or diesel, Oil Secretry Neeraj Mittal said Thursday, after Jio-bp and Nayara Energy imposed purchase limits at some of their outlets as a widening price gap drove industrial users to petrol pumps to stock up on cheaper diesel.

“Nobody is allowed to cap fuel sales. It is not acceptable; it is not done,” he told reporters here, adding that the Government’s position had not changed.

Private retailers Jio-bp and Nayara Energy had last month introduced purchase limits at some outlets as factories, telecom companies, hotels, hospitals and other bulk users increasingly bought diesel meant for retail customers.
The unusual rush is being driven by a price gap of as much as Rs 50 a litre between retail diesel and fuel sold to bulk consumers, creating a powerful incentive for large users to shift purchases to petrol pumps.
Jio-bp has capped diesel purchases at 50 litres per customer per day at some outlets, while limits at Nayara Energy stations range from 70 litres to 200 litres.

“In the past, letters had been issued; instructions had been issued to them (for restricting fuel sales). There is no change in the Government view on this,” he said. Oil Minister Hardeep Singh Puri said his ministry is “in touch” with the private fuel retailers but did not elaborate.

Retail petrol and diesel prices have remained unchanged since May despite rising international crude prices. Prices charged to industrial and other bulk consumers, which are more closely linked to international market rates, have risen more sharply.

The resulting gap between retail and bulk diesel prices has widened to as much as `50 a litre, prompting some large consumers to buy diesel from retail stations instead of dedicated outlets, people in the industry said.
Some industrial users are purchasing 400 to 600 litres at a time from retail outlets, significantly above the volumes typically bought by individual motorists.

The shift is putting pressure on inventories at individual petrol pumps, which have finite storage capacity and may require at least a couple of days for replenishment through the fuel supply chain, industry sources said.
Jio-bp, a joint venture between Reliance Industries and Britain’s BP, earlier this week stated that all its mobility stations were operational and adequately stocked.