Date:14/01/2009 URL: http://www.thehindu.com/2009/01/14/stories/2009011453350300.htm

Other States - Punjab

Punjab oil dealers cut fuel orders by 20 per cent

Faced heavy losses following the reduction in prices last month; negligible demand for diesel from farm sector

Central Government is likely to announce another cut in fuel prices within next ten days
‘Do not want to suffer losses by having inventory at higher rates after reduction in fuel prices’

Chandigarh: Having faced hefty losses following the reduction in oil prices last month, Punjab fuel outlet owners have cut down their petroleum product orders by 20 per cent as the government is likely to announce another cut in fuel prices within 10 days.

“The fuel outlet dealers have reduced their indenting by 20 per cent as they do not want to suffer losses by having inventory at higher rates after reduction in petroleum prices,” Punjab Petroleum Dealers Association general secretary B R Tiwari said on Tuesday.

He lamented that petrol outlet owners suffered huge amount of losses when the government reduced fuel prices last month as they were left with oil stocks carrying higher cost, forcing them to absorb the burden themselves.

The Centre had cut petrol and diesel prices by Rs 5 and Rs 2 per litre in December when global crude prices touched a four-year low.

Another reason cited by fuel pump owners to lessen their orders is negligible demand of diesel from the farm sector in the current rabi season.

“There is very less demand from the agriculture sector following sowing of wheat crop throughout the State. Now because of prevailing weather conditions, there is no requirement of diesel for irrigation which has hit our sales hard,” he said.

Although eight-day long truckers’ strike has been withdrawn but it had affected fuel sales during the period.

“Truckers’ strike has also impacted our sales as diesel sales to trucks constitute major portion of total sales,” he said while adding that his own pump witnesses sales plummeting by 50 per cent.

Punjab has about 2,500 fuel pumps, comprising 1,450 outlets of Indian Oil and remaining of BPCL and HPCL. In state, the average demand of petrol and diesel is 2,100 KL per day and 5,000-7,000 KL per day respectively, industry sources said.

Stating that it (reducing indenting by pump owners) is part of business proposition and it is natural on the part of dealers, a senior official of Indian Oil said, “Oil Company ensures that the fuel outlets should have at least 40-50 per cent of their total stock.”

However, he said, Indian Oil, which has 48 per cent market share in Punjab, said so far the company has not observed any reduction in orders in view of heavy supply made to fuel outlets due to recent oil employees strike. “The actual impact will be known from tomorrow onwards”’ he said. -- PTI