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State-run oil companies sold 30-40% more fuel than the average in the days following the demonetisation of Rs 500 and Rs 1,000 notes that set off panic among people, sending them in hordes to fuel stations, one of the few places allowed to accept old notes.
Hindustan Petroleum Corporation Ltd sold about 30% more fuel daily in the past four-five days than what it did on an average day in October, chairman MK Surana said.
“When people are unsure of supplies they want to hoard it. Second, people bought petrol to dispose of old notes they couldn’t have used anywhere else. Third, people feared they may not be left with enough usable cash in future, so why not fill their fuel tanks now,” Surana said.
State-run oil companies sold about 30% more petrol and 40% more diesel than normal between November 9 and 13, a senior executive at a state oil firm said on condition of anonymity.
The demand is now tapering off and petrol pump dealers are bracing for slow sales in the next few days. “There is no desperation anymore. The panic has ended,” said Nitin Goyal, who owns a petrol pump in Delhi and is a treasurer at All India Petroleum Dealers Association.
Tuesday saw lower sales, Goyal said. “Everyone has filled to capacity. It will take a few days for them to use that before returning to a pump,” he said.
There have been fears about the demonetisation-induced cash crunch slowing down consumption in the economy, but HPCL’s Surana said he expected no significant impact on fuel consumption on this account.
“Those who have a car will continue to drive. We don’t expect our sector to have any significant impact. Some minor impact could be there but no large impact is expected,” Surana said.
India’s fuel demand surged 6.7% in October from a year ago after declining in September, aided by a sharp rise in petrol and diesel consumption. Fuel consumption rose 7.8% in the seven months through October this year. Petrol consumption rose 13.8% to 2.1 million tonnes in October. The demand for diesel, which accounts for 40% of all fuels consumed in the country, climbed 5.1% to 6.7 million tonnes.
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