Petrol pumps cap inventory amid hopes of fuel price cut

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₹5 cut (on petrol and diesel) dealers in rural India would lose about ₹1-1.5 lakh, and those in tier-III cities would lose about ₹5-7 lakh. In the case of tier-II cities, the losses may be in the range of ₹10-15 lakh per pump, and for dealers in metro cities it may well be around ₹25-30 lakh." He said stocks and capacity vary depending on the region and the demand in that specific area. "There is a public demand for a cut in fuel prices as it was believed that they would be reduced if prices slip below $80 per barrel.

It remained under that level for a considerable time," Bagai said. “The anticipation was also there ahead of the assembly elections in four states last year and a similar trend in terms of stocks was witnessed across pumps. The purchase, however, increased after the assembly polls, and now in the last 30 days, pumps are again buying less...only keeping levels required to meet the demand." He said the losses would be significant for pumps, which have already been operating at low margins, with dealer commissions at the same levels for the seven years.

Petrol pump bodies have been seeking an increase in their commission which currently stands at ₹2.90 per litre for petrol and ₹1.85 per litre in the case of diesel. Stressing that there is no scarcity of fuel at pumps despite the lower purchases by retail outlets, Ajay Bansal, representative of All India Petrol Pump Dealers Association said, "There is no shortage. But yes, if pumps were buying 10,000 litre, they are now purchasing 8,000 litres of fuel.