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Why are some states facing fuel shortage? 

Dealer associations in states including Rajasthan, Madhya Pradesh, Gujarat and Tamil Nadu have reported a shortage, as many private fuel pumps have either shut or reduced sales. The government says users switching from them to state-run retailers has boosted demand, causing a temporary logistics issue. The oil ministry has also attributed the surge to a 50% year-on-year growth in demand in June. The same period, last year, had seen very low demand due to covid-19. Pumps, however, say the main reason for the crisis is a shortfall in supply. Separately, farm demand for diesel is up as sowing starts.

Why are some states more affected?

States which have been worst-affected by the shortage are the ones with a heavy dependence on the pumps of private companies, which have shut or reduced fuel sales. In Rajasthan, fuel retail outlets run by private companies cater to 15-17% of the fuel demand. Out of the 6,475 pumps in the state, 1,275 belong to private companies. Similarly, private companies own 500 out of the total 4,900 pumps in Madhya Pradesh. The comparatively higher dependence on private companies’ pumps has led to the shortage in the affected states, while other states have remained largely unaffected.

Is the fuel shortage a cause for concern?

It may not be a major cause for concern. The government has said that the country has adequate fuel to meet the rising energy demand in the country. India’s crude oil imports have also increased of late. However, a prolonged closure of the pumps of private fuel retailers may keep demand pressure high on the depots of state-run oil companies.

How long will the demand pressure last? 

Petrol pump associations said that the situation seems to be easing now as supplies turn up. However, normalcy across every region may take a bit of time. According to the Rajasthan Petroleum Dealers’ Association, supplies are now adequate in Jaipur, but rural pumps are struggling. Suneet Bagai, president of the association, said supplies from HPCL are expected to reach by Sunday as they usually transfer fuel through pipelines. The pressure, however, is expected to last for the next 20 days till the kharif sowing ends.

What is being done to ease the situation?

The petroleum ministry said that oil companies have geared up to tackle these issues by increasing stocks at depots and terminals. They have deployed more trucks to serve retail outlets and depots, and terminals have resorted to extended working hours including at night to cater to the extra demand. Oil marketing companies have also made provisions for supply of more fuel in the affected states. The state-run oil marketing companies have assured adequate product availability and supplies across their networks.

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