India’s auto fuel sales surged past pre-pandemic levels in the first half of March as consumers and dealers filled tanks in anticipation of a likely price hike after the election.
Dealers, as well as the public, refilled their tanks as they anticipated prices, which have been suspended in the run-up to elections in states like Uttar Pradesh will rise by a large margin to make up for as much as possible. 60 percent increase in raw material costs.
Gasoline sales by state-owned fuel companies, which control about 90 percent of the market, were nearly 18 percent higher than the same period last year at 1.23 million tons in the period March 1-15, and 24.4 percent higher. than in the period in 2019, preliminary industry data showed.
Diesel, the most widely used fuel in the country, saw sales rise 23.7 percent year-on-year to 3.53 million tons. This was 17.3 percent higher than sales in March 1-15, 2019.
While gasoline sales were 24.3 percent higher than March 1-15, 2020 sales, diesel sales were up 33.5% over the same reference period.
Month-on-month, gasoline sales rose 18.8 percent and diesel sales rose 32.8 percent.
Diesel sales from March 1-15 are the highest in the first half of each month for the past two years and exceed the total volume of diesel sold in April 2020, when the country was completely shut down.
Industry sources said that while there were panic buying by individual vehicle owners, gas station dealers filled not only their storage tanks, but every mobile browser or tanker they had. The dealers hoped to make a quick buck by buying fuel at a lower rate and selling it at revised higher prices.
Oil Minister Hardeep Singh Puri said on Monday that fuel sales had risen 20 percent after comments urging people to refuel in preparation for an imminent rise in petrol and diesel prices.
Petrol and diesel prices hit the freeze button just as election campaigns for five states, including Uttar Pradesh, ramped up in early November 2021. The record stop of 132 days was despite the increase in raw material costs from $81 per barrel to $130 per barrel.
It was expected that once the elections are over, state-owned fuel retailers will adjust prices, which were as much as Rs 12 per liter below cost. But rates have not changed, even after the state polls, possibly to give the opposition no footing during the second half of the budget session that started Monday.
“On March 5, a political leader made a statement saying, fill your tanks quickly, because petrol prices will rise when the elections are over. And consumption increased by 20 percent,” Puri said in Rajya Sabha, referring to a statement by Congress Leader Rahul Gandhi. “It’s a shame that one statement led to 20 percent hoarding.”
On March 5, Gandhi had asked the people to set up tanks as the “election offer” will soon expire.
“Make sure your gas tanks are full quickly. The Modi government’s ‘election offer’ will expire soon,” Gandhi said in a tweet in Hindi, using a photo of a gas pump captioned “Hike” and “Back soon to refueling stations near you”.
Congress accuses the BJP government of slowing the rise in fuel prices during elections and raising prices shortly after the polls are over.
Parliamentary elections in five states, including Uttar Pradesh, started on February 10 and ended on March 7. The counting of votes took place on March 10.
Puri said international oil prices had risen from $19.56 a barrel in 2020 to $130 a barrel earlier this month and have now fallen to $100 a barrel.
“Oil marketing companies will make their decisions (about fuel prices). They will move on once they can’t bear it any longer. If they don’t have the margin or the cushion, they will take the right step,” he had said.
Aviation fuel (ATF) sales more than doubled to 232,900 tons in March 1-15, 2022, but were 31.1 percent less than the pre-Covid level of 2019 and 27.5 percent less than sales in the same period in 2020.
India went on a complete lockdown in the last week of March 2020, halting flights, halting train and road movement and closing businesses to contain the spread of the coronavirus. The period from March 1-15, 2020 was almost normal as the Covid restrictions just came into effect.
The aviation sector has yet to resume normal operations.
LPG sales rose 17 percent to 1.3 million tons from March 1-15, the data shows.
This post Hoarding on the expectation of price increases leads to a sharp increase in sales of petrol and diesel
was original published at “https://www.zeebiz.com/india/news-hoarding-on-price-hike-expectation-leads-to-surge-in-petrol-diesel-sales-181054”
