'No Fuel Shortage, Only Panic'

'There is no shortage of fuel whatsoever.'
'India is stock surplus as far as petrol and diesel are concerned.'

Every dealer, every association president, every pump owner who spoke to this correspondent said the same thing: There is no shortage of petrol, diesel, or household LPG in India. Not one.

What is happening instead -- and what nobody in authority has bothered to explain to the ordinary motorist or the housewife anxious about her cooking gas -- is a quiet but consequential policy change buried inside the billing systems of India's oil marketing companies.

The Oil marketing companies (OMCs), bleeding up to Rs 50 on every litre they sell because the government has frozen retail prices even as crude costs have shot up following the war in West Asia, have simply pulled the credit rug from under thousands of petrol dealers across the country.

Where dealers once procured fuel and settled accounts within a day or two -- a routine, unremarkable arrangement that had worked for years -- they are now required to pay in full, in advance, before a single tanker will move.

For the large, well-capitalised pumps of Mumbai, Delhi, or Kolkata, this is an inconvenience.

For the smaller dealer in Sambhajinagar or on a highway outside Nagpur -- the man who extended 30-day and 60-day credit to truckers and local businesses and is now being asked to clear all of it before he can restock -- it is a crisis.

Two dry pumps in a town of ten is enough. Someone posts a photograph. A WhatsApp message goes out. A queue forms at the one pump that still has fuel. By evening, that pump is dry too.

The shortage, in other words, is not in the tanks beneath the forecourt of fuel pumps. It is in the cash flow of the man who runs it.

Meanwhile, household LPG cylinders are moving freely, commercial cylinders for hotels and restaurants have been deliberately rationed, CNG supply is holding, and Iranian-flagged passage through the Strait of Hormuz has just been restored for Indian vessels.

The crisis, such as it is, may be closer to its end than the panic suggests.

'There is no shortage of fuel whatsoever'

"There is no shortage of fuel whatsoever," says Ali Daruwala, a core committee member of the All India Petrol Dealers Association based in Pune. "India is stock surplus as far as petrol and diesel are concerned. Trust me when I say stock surplus -- stock surplus."

Daruwala, who had five or six reporters waiting on hold when this correspondent reached him, was categoric that what India was witnessing was not an energy crisis in the classical sense.

The problem, he explained, was a financial one -- and it had a specific trigger.

"The oil (marketing) companies have changed their policy. They used to give us product and we used to clear it on Monday when the banks used to open. Now, they have stopped that line. They have said whatever is your previous balance, you need to clear it." He paused, then added: "On the basis of this previous balance, we have given credit to our creditors -- people who buy fuel on credit at our petrol pumps. Some have 30-day credit, some have 60-day credit, whatever the payment schedule with the pump owners."

The oil marketing companies -- Indian Oil, Bharat Petroleum, and Hindustan Petroleum -- had long operated on a system not unlike a credit card, where dealers could procure fuel and settle accounts when banks opened after weekend closures. That arrangement, Daruwala says, has been abruptly discontinued.

"You need to deposit it in advance. Then only we will fill your tankers. So the sudden, sudden cancellation of this credit line has put a few pump owners in a very sticky situation."

OMCs Bleeding Rs 50 Per Litre, Dealers Pay the Price

The reason, Daruwala says, is rooted in arithmetic. "Every litre of petrol and every litre of diesel sold as of now -- because of this war-like situation -- the oil company face Rs 50 loss per litre. And you cannot expect a company which is going in loss to extend your credit."

The government had pledged not to raise prices at the pump even as crude costs soared following the Hormuz disruption. Private players like Reliance had already moved, hiking prices by roughly Rs 5 per litre, but government-owned refiners remained constrained.

"It's not that they can't do it. They can do it, but the government is holding it back. Government has promised the citizens that they will not increase the prices of petrol and diesel."

The result, says Daruwala, is a cash-and-carry moment for India's fuel retail network.

"As of now, it's cash and carry." He estimated that 5 to 10 per cent of the total pump network was affected, and that the disruption was concentrated not in the metropolises but in smaller towns.

"In remote areas -- Sambhajinagar, Nagpur, all these regions, not the metropolises -- small regions are seeing this crisis. But this crisis does not mean that there is a shortage of petrol or diesel. We have stock, we have surplus."

'LPG domestic, there is no shortage. LPG commercial, yes, there is a shortage'

Uday Lodh, President of the Consortium of Indian Petroleum Dealers (CIPD), broadly agreed with that diagnosis -- but was noticeably more troubled by what he was seeing on the ground.

"LPG domestic, there is no shortage. LPG commercial, yes, there is a shortage. Government is not releasing the cylinders. About petrol and diesel, the oil companies are releasing the product in a controlled way. We are not able to purchase it freely."

Asked why the OMCs had switched to advance payment, Lodh was blunt: "This is the opportunity. They know what people will do -- whatever -- but they will purchase. They say that we are incurring losses per litre, and the more we sell, the deeper into losses we go. The less we sell, that is our protection."

He pushed back firmly on any suggestion that OMCs deserved sympathy on account of their balance sheets. "OMCs have big, you know, big balance sheets. Big pockets, deep pockets. So ten lakh rupees for a small dealer -- yeah, it's a big amount. And in the month of March, you are telling that you pay in advance. Is it the right thing?"

25 Per Cent Dealers Running Dry, Rural Maharashtra Worst Hit

The situation at the pump level, Lodh says, was creating a cascading panic. "Because of this fund management issue, everybody is not able to cope up with the purchase. So somebody (fuel pump) goes dry. And once in the market, out of 10 outlets, even two are dry -- immediately WhatsApp message."

He estimated that approximately 25 per cent of dealers were experiencing dry-outs at any given time. "Today I'm dry, tomorrow my neighbour is dry. Like that."

The OMCs, he said, had also introduced a new restriction on how much stock dealers could hold. "In normal times, they would say you should store 5 days' diesel and 3 days' petrol stock. Now they say you won't get a product for average sale of 2 days. When you are having a stock for 2 days' sale, then that is enough for you. You will not get a load beyond that."

He was unambiguous about the longer-term impact. Asked whether a month of this would put India in deep trouble, he said: "Absolutely."

Lodh also flagged the divergence in how CNG had fared compared to petrol and diesel. "CNG is comparatively not disturbed. CNG already has a disrupted supply because of logistic issues -- everywhere there is no pipeline, it goes via cascade and all. There is always a gap in two supplies, but it has not gone down. Comparatively okay."

A Mumbai-based petrol and LPG dealer, who spoke on condition of strict anonymity, offered a granular, street-level view of how this was playing out in the city. His assessment on petrol: No real shortage, just adjustment pains.

"There is absolutely no shortage of petrol. What has happened is that the company is asking advance money now. There is a little disturbance because people are not adjusting to that system."

The dealer explained that the old arrangement had merely moved the payment clock forward by one day.

"Earlier, I could take a load today and pay by 7 o'clock tonight. Now they ask for one day before. The confusion is that many dealers are small dealers -- they are not able to manage." He was dismissive of any suggestion that petrol itself was unavailable for those who had settled their accounts. "No quota at all. If you have the money, you can buy the product. That's all."

Mumbai Pump Owner Stands Till 10.30 pm Telling Motorists: Don't Panic

On the behaviour of his customers, he was forthright. "People are unnecessarily panicking. There is no need. How many times I've told them -- do not panic, you got sufficient stock. I'm operating from 6 o'clock in the morning to 12 o'clock midnight, and there's no queue at my pump. But if you say there's a shortage, then they run."

He said he stood at his outlet until 10.30 pm, personally addressing motorists. "I told motorcyclists and scooterists -- fill your tank if you want, I'll even give you 50 litres. But don't crowd unnecessarily. What's the point of Rs 300 worth? A scooter gives 60-70 km (mileage per litre), that's enough. It can last 15 days, even a month. By then, the war may be over."

On the LPG side, however, his account was strikingly different. Commercial cylinders -- the large ones used by hotels and restaurants -- had simply stopped coming.

"From 24 days, I have not got a single big cylinder. I'm getting only small cylinders." The government, he said, had made a deliberate choice to protect domestic users.

"They want to ensure house cylinders run properly. House LPG, okay. Directly to CNG. So that the house should not suffer, your cooking, your kitchen should not suffer."

He added that the only commercial allocation he had received was a consignment of 30 cylinders, and those had gone straight to a hospital. "That was all for a hospital. I gave all of them away -- they have extreme shortage in LPG."

For household cylinders, though, supply remained intact. "I get whatever I want," he said. "No problem at all. Unnecessarily people have created panic by booking in advance."

Ravi Shinde, former president of the Mumbai Petrol Dealers Association -- who also holds a gas dealership -- was candid about where the media's role ended and structural reality began. "The media is somewhat responsible for the panic buying. People hear rumours, and even if there is a little petrol available, they rush to buy it. Normally, sales are steady, but now pumps are running dry because we weren't prepared for customers suddenly wanting to fill their tanks to the brim."

Shinde noted that dealers themselves were in an uncomfortable position when it came to telling customers not to panic. "We aren't necessarily telling them not to panic, but we can't stop a customer from filling their tank. If I were a customer, I'd probably do the same thing. We can't tell them 'don't worry' when the situation is like this. We are allowing people to fill up as much as they want."

His assessment of the urban-rural divide was stark. "In rural areas, supply is being diverted to major cities. About 90 per cent of rural pumps are going dry. This isn't happening in Mumbai yet, but it is happening across Maharashtra. We have a WhatsApp group with other dealers (from rural areas) where they are complaining." The complaints, he said, were coming primarily from rural districts, not urban centres.

On the question of demand patterns, Shinde confirmed what the others had described anecdotally. "There is a clear increase. People are panicking. They just want to pay the money and get a full tank without hesitation. As long as they have the money, they get the petrol and leave."

Iran Opens Strait of Hormuz: LPG Tankers En Route to India

The one potential relief on the horizon -- cited by Daruwala with evident satisfaction -- was diplomatic in nature. "The good news today at 12.30 pm -- because of our good bilateral relationship -- Iran has allowed Indian vessels to pass through the Strait of Hormuz." He estimated the normalisation timeline at nine to ten days, once vessels already at sea completed their passage.

He also claimed that a substantial LPG cargo which had been en route to China was being diverted to India. "65 lakh cylinders' worth of gas is already decanting as we are talking, in Kerala, which was en route to China."

"In 9 to 10 days, our vessels will reach here," he said. For now, the pumps that matter in India's cities remain stocked, the small cylinders keep coming, and the panic -- say those who handle the fuel every day -- is the one thing in genuinely short supply of reason.

Photographs curated by Anant Salvi/Rediff