Fuel stock restrictions imposed on petrol pumps in Kerala amid surge in demand

Kochi: Public sector oil marketing companies (OMCs) have implemented unannounced stock restrictions on petrol pumps across Kerala, leading to a major fuel shortage. Currently, dealers report that they are being supplied with only enough stock to survive for roughly two days, despite a sharp rise in regional fuel consumption.

Supply rationed based on daily sales

Reports indicate that OMCs are now restricting fuel loads to a value of approximately ₹12–15 lakh per day, calculated strictly against the average daily sales of individual pumps. This "measured" distribution has left dealers in a precarious position, as any delay in tanker arrivals could lead to an immediate "dry out" (running out of stock).

The crisis is exacerbated by the summer holidays, which have seen fuel demand in the state spike by 10% to 13%.

Factors fueling the crisis

Automation systems allow sales officers to monitor real-time stock levels and sales data at every pump. Loads are only sanctioned once digital payments are received. However, several factors are hindering this process.

Credit restrictions: Amid the geopolitical tensions in the Middle East, oil companies have reportedly withdrawn credit facilities, requiring dealers to make immediate upfront payments for every load.

Banking delays: Frequent bank holidays have delayed the transfer of funds from dealers to the OMCs, resulting in stalled shipments.

Logistical hurdles: Districts such as Malappuram, Kozhikode and Palakkad are facing frequent "dry out" situations. M M Bashir, Secretary of the Kerala State Petroleum Traders Association, noted that the time taken for tankers to travel by road to districts far from the Ernakulam supply hub is causing critical gaps in availability.

The "Dead Stock" dilemma

Every petrol pump maintains a "dead stock" of roughly 1,500 to 2,000 litres at the bottom of the storage tanks, which is not intended for sale to protect the integrity of the pumps and tanks. Melath Radhakrishnan, former General Secretary of the All Kerala Federation of Petroleum Dealers, warned that due to the current supply limits and upcoming public holidays (such as May 1st), even this reserve is under pressure, and many pumps may be unable to meet consumer demand in the coming days.