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Govt includes fuel retail outlets in remote areas under Universal Service Obligation to ensure uninterrupted supply

The Universal Service Obligation will make it obligatory for OMCs to provide supply to retail pumps across the country for the benefit of the end-customers.

June 17, 2022 / 02:43 PM IST
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The Union government has expanded the scope of Universal Service Obligation (USO) to cover fuel retail outlets (ROs) in remote areas to ensure quality and uninterrupted fuel supply services to the consumers, according to an official statement on June 17.

The move comes after petrol pump dealers across the country wrote to the petroleum ministry about supply constraints from Oil Marketing Companies (OMCs), which had led to several pumps running dry, especially in remote areas, especially in Madhya Pradesh, Rajasthan and Karnataka. The USO will make it obligatory for OMCs to provide supply to retail pumps across the country for the benefit of the end-customers.   

“Now the authorized entities have been obligated to extend the USO to all the retail consumers at all the retail outlets. This has been done with an objective to ensure higher level of customer services in the market and to ensure that adherence to the USO forms a part of the market discipline,” the statement said. 

These USO will include, that the oil marketing companies maintain supplies of petrol and diesel throughout the specified working hours and of specified quality and quantity, make available 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 and  ensuring availability of fuel to the customers at reasonable prices.

Public sector fuel retailers– Indian Oil Corporation Ltd (IOCL), Hindustan Petroleum Corporation Ltd (HPCL), and Bharat Petroleum Corporation Ltd (BPCL), have not increased the retail price of petrol and diesel in line with the steep increase in crude oil prices. They typically revise retail petrol and diesel prices daily, based on the rolling average of international benchmark prices over the past 15 days. While they increased prices of fuel sold to bulk consumers and aviation turbine fuel in line with the sharp rise in crude oil prices, retail prices of petrol and diesel were left unchanged for almost 137 days until March 22. Even though the prices have been revised since March 22, the OMCs are still making losses on retail sales of fuel. 


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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.
Rachita Prasad heads Moneycontrol’s coverage of conventional and new energy, and infrastructure sectors. Rachita is passionate about energy transition and the global efforts against climate change, with special focus on India. Before joining Moneycontrol, she was an Assistant Editor at The Economic Times, where she wrote for the paper for over a decade and was a host on their podcast. Contact:
first published: Jun 17, 2022 02:43 pm
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