As fuel supply issue persists, Govt expands USO to petrol pumps in remote areas

Our Bureau | | Updated on: Jun 17, 2022
Retail outlets run by PSU OMCs are facing supply issues, which industry sources say is due to these companies supplying less fuel to check under-recoveries

Retail outlets run by PSU OMCs are facing supply issues, which industry sources say is due to these companies supplying less fuel to check under-recoveries | Photo Credit: NAGARA GOPAL

Responsibilities under USO include ensuring the availability of petrol and diesel to customers at reasonable prices

As petrol pumps in several States face supply shortages amidst sowing in the Kharif season, the government on Friday expanded the scope of the Universal Service Obligation (USO) by including all retail outlets (ROs), including those in remote areas.

“The government has now expanded the horizons of the USO by including all ROs, including remote area ROs, under their ambit. Now the authorised entities have been obligated to extend the USO to all retail consumers at all retail outlets. This has been done with the objective of ensuring a higher level of customer service in the market and to ensure that adherence to the USO forms a part of the market discipline, “the Ministry of Petroleum and Natural Gas (MoPNG) said in a statement.

It has been an endeavour of the government that for remote area ROs, the authorised entities provide quality and uninterrupted fuel supply services to the consumers by way of the USO, it added.

Universal Service Obligation

The Centre relaxed the criteria for grant of authorisation for the marketing of transportation fuels by issuing a resolution on November 8, 2019, with the aim of ensuring greater participation of the private sector in the fuel retail business. Simultaneously, it also ensured the setting up of retail outlets (ROs) in remote areas by these entities, MoPNG said.

The USO mandates companies to maintain supplies of motor spirit (MS), or petrol, and high-speed diesel (HSD) throughout the specified working hours and of specified quality and quantity.

It also includes making available minimum facilities as specified by the centre; maintaining minimum inventory levels of MS and HSD as specified from time to time; providing services to any person on demand within a reasonable period of time on a non-discriminatory basis; and ensuring the availability of fuel to customers at reasonable prices.

Supply crunch

Retail outlets run by PSU OMCs, particularly BPCL and HPCL, are facing supply issues, which industry sources say is due to these companies supplying less fuel to check under-recoveries. The supply crunch comes as the sowing in the kharif season is underway.

The MoPNG, in a statement on Wednesday, said that at specific locations in some States, there has been a significant increase in demand for petrol and diesel, with an increase being as high as 50 per cent during the first half of June 2022 over the corresponding period of last year.

“In particular, this has been noticed in Rajasthan, Madhya Pradesh and Karnataka. These are States where a large quantity of supply is being done by retail outlets belonging to private oil marketing companies (OMCs) and where the distances from supply locations like terminals and depots are longer,” it added.

In general, the increase in demand has been on account of the seasonal surge in demand due to agricultural activities; bulk buyers shifting their purchases to retail outlets; and a substantial reduction in sales by private OMCs, with their substantial volumes having shifted to PSU ROs.

Besides, due to the crackdown by the government on illegal bio-diesel sales, the volumes have also been added to the RO diesel sales.

Published on June 17, 2022
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