The government has asked state-run fuel retailers to create liquefied petroleum gas (LPG) reserves equivalent to at least 30 days of demand after supply disruptions during the three-month-long West Asia conflict exposed India’s vulnerability to import shocks and underscored the need for larger strategic buffers.
“We are working on the strategic reserves. Oil marketing companies have been asked to work out (a plan) to have LPG reserves for a minimum of 30 days with them, and they are working on it,” Sujata Sharma, joint secretary, ministry of petroleum and natural gas, said on Friday.
While India was able to source alternative supplies of crude oil and natural gas during the disruption, LPG availability came under pressure, forcing the government to regulate supplies to commercial consumers.
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Beyond Commercial Inventories
The government has asked state-run oil marketing companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) to prepare plans for creating additional LPG storage capacity over and above regular commercial inventories.
Sharma said the government was also working on expanding crude oil storage capacity.
The government maintained that domestic fuel supplies remain adequate. According to Sharma, the country has sufficient stocks of petrol, diesel, LPG, crude oil and natural gas, while refineries are operating at optimum levels.
“LPG production is at an all-time high of around 52,000 tonnes per day. No dry out reported at any LPG distributorship,” she said.
Market Distortions
At the same time, authorities flagged unusual buying patterns in the retail fuel market.
“Abnormal sale is being observed at many petrol pumps,” Sharma said, attributing the trend partly to increased agricultural activity and a shift in purchases from private retailers and bulk consumers to state-run outlets because of price differences.
More than 150 districts recorded over 30 per cent growth in petrol sales, while sales doubled in 14 districts. Diesel sales rose more than 30 per cent in 156 districts, with six districts reporting growth exceeding 100 per cent.
Private fuel retailers have seen diesel sales decline by 38 per cent, while bulk diesel sales of state-run oil marketing companies have fallen 29 per cent, Sharma said.
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The government said it is closely monitoring the situation and has advised states and Union Territories to form special squads to prevent hoarding and black marketing. Consumers have also been urged to avoid panic buying and purchase fuel only through authorised channels.
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