According to an official statement issued on June 17, the Union government has expanded the scope of the Universal Service Obligation (USO) to include fuel retail outlets (ROs) in remote areas to ensure quality and uninterrupted fuel supply services to consumers.
The move comes after petrol pump dealers across the country complained to the petroleum ministry about supply constraints from Oil Marketing Companies (OMCs), which had caused several pumps to run dry, particularly in remote areas of Madhya Pradesh, Rajasthan, and Karnataka. The USO will require OMCs to provide supply to retail pumps across the country for the benefit of end-users.
“The authorised entities are now required to extend the USO to all retail consumers at all retail outlets.” This was done to “ensure a higher level of customer service in the market and to ensure that adherence to the USO forms part of market discipline,” according to the statement.
Require oil marketing companies to maintain supplies of petrol and diesel
These USO will require that the oil marketing companies maintain supplies of petrol and diesel during the specified working hours and in the specified quality and quantity, provide minimum facilities as specified by the central government, maintain minimum inventory levels of fuel as specified by the Centre, from time to time, provide services to any person on demand within a reasonable period of time, and that they do not discriminate on the basis of race or ethnicity.
Other public sector fuel retailers have not increased the retail price of petrol and diesel
Indian Oil Corporation Ltd (IOCL), Hindustan Petroleum Corporation Ltd (HPCL), and Bharat Petroleum Corporation Ltd (BPCL), public sector fuel retailers, have not increased the retail price of petrol and diesel in response to the sharp increase in crude oil prices. They typically revise retail gasoline and diesel prices daily, based on a rolling 15-day average of international benchmark prices. While they increased the price of bulk fuel and aviation turbine fuel in response to the sharp rise in crude oil prices, retail prices of gasoline and diesel remained unchanged for nearly 137 days, until March 22. Despite price increases since
March 22, the OMCs continue to lose money on retail fuel sales.
Dealer associations wrote to the government that they were facing a paucity of supply, especially from HPCL and BPCL. The Ministry of Petroleum & Natural Gas made a statement on June 15 on the matter, stating that there have been “delays and increased waiting time for customers” and attributed it primarily to an “unprecedented” demand growth and “logistics issues at the local level”. OMCs were also quick to add that the demand-supply mismatch is due to higher demand from customers and shift from private retailers.
