Petroleum ministry says strategic reserves and commercial stocks secure supply as refiners report under-recoveries on petrol, diesel

 India currently holds the equivalent of about 76–80 days of fuel cover across strategic petroleum reserves, refinery inventories and commercial stocks, Petroleum Minister Hardeep Singh Puri said on Monday, even as oil companies told the government they are incurring large daily losses on retail fuels.

According to officials, the minister made the assessment in a briefing with senior ministry staff and industry representatives, stressing that short-term shocks in the Middle East would be manageable from existing stocks and alternative sourcing. “We have a comfortable cushion to meet short disruptions,” an official summary of his comments showed.

Refiners report steep under-recoveries

In a separate briefing the same day, Additional Secretary Praveen Khanuja said state-run refiners are facing under-recoveries — the gap between administered pump prices and actual costs — of roughly ₹30 per litre on diesel and about ₹6 per litre on petrol. That, Khanuja said, translates into an estimated daily loss of about ₹600–700 crore for oil companies, excluding LPG.

Industry sources familiar with the discussions confirmed the figure and said companies have flagged the strain to the ministry, urging support measures if sustained volatility pushes losses higher.

Short-term resilience, long-term risks

Puri told reporters that India’s priority is to maintain at least 60 days of cover for crude oil, natural gas and LPG each — a threshold the country is currently meeting, he said. He cautioned, however, that a prolonged escalation in the Gulf, especially if maritime chokepoints such as the Strait of Hormuz were closed for an extended period, would alter the outlook.

“If disruptions remain short-lived, we can manage through strategic reserves and alternate routes,” an aide to the minister said. “But a long-drawn conflict would have broader impacts on global energy markets and will need additional responses.”

Officials stressed that if the Strait of Hormuz were blocked temporarily, India could withstand around 30 days of disruption using available inventories and adjusted supply chains. The government has also been pursuing diversification of suppliers and additional long-term contracts to reduce concentration risk.

Supply diversification underway

Puri pointed to steps taken to widen supply sources beyond Gulf producers. He said talks have taken place to secure extra LPG cargoes from the United Arab Emirates if required, and pointed to planned gas supplies from Mozambique as another buffer that would strengthen India’s energy security over time.

The minister also highlighted domestic measures: expansion of drilling and exploration, faster investment in refining capacity and stock management. “We are not just dependent on strategic reserves — refinery inventories and retail stocks form a significant part of our buffer,” he said, noting India currently operates 24 refineries and continues to expand capacity.

Domestic stock management defended

Responding to criticism that India did not build up reserves when crude prices dipped after the pandemic, Puri rejected the charge. Officials explained that inventory management balances commercial use and replenishment; crude cannot be stored indefinitely at the cost of foregoing domestic supply needs and refinery runs.

The ministry said it will continue active stock rotation and procurement aligned with market conditions, while also accelerating domestic exploration projects, including in the Andaman basin.

Impact on consumers and next steps

For now, the immediate consumer impact is muted because pump prices in India remain regulated in part and retail changes reflect global price swings with a lag. Still, the reported under-recoveries signal pressure on state refiners’ finances, and sustained losses could push discussions on fiscal support, temporary price adjustments or targeted relief measures.

Officials said they will continue daily monitoring of port call schedules, cargo availability and refinery throughput. Industry sources expect the ministry to hold further meetings this week to review options if tensions in the Middle East intensify.

Related context

The ministry noted that LPG connections in the country have risen from about 14 crore in 2014 to more than 33 crore now, reflecting strengthened domestic distribution networks that would be mobilised in any disruption. Separate briefings this week also warned of inflationary pressure on household fuels if international LPG prices remain elevated.

Madhya Pradesh Fuel Shortage Rumours Trigger Panic Buying at Petrol Pumps

Officials across Indore, Ujjain, and Bhopal have assured citizens that there is no real crisis, attributing the long queues to misinformation circulating on social media.

Long queues snaked outside petrol pumps across several districts of Madhya Pradesh on Wednesday as unverified rumours of an imminent fuel shortage triggered panic buying among residents. The state administration, however, moved swiftly to quell the fears, assuring that petrol and diesel stocks are sufficient for months.

Panic Spreads Across Districts

The rush was most visible in districts including Jhabua, Barwani, Maheshwar, Indore, and Ujjain. Reports of pumps running dry began surfacing after rumours, allegedly linked to escalating tensions between Iran and Israel, spread through local communities. In Agar Malwa, crowds gathered from early morning, with one fuel station exhausting its reserve quota by nightfall. Supply was restored only after a tanker arrived the following morning.

Administration Assures Ample Stock

Amid the growing anxiety, officials stepped in to clarify the situation. Bhopal Food Controller Chandrabhan Singh Jadaun confirmed that the city currently holds a reserve of 58.79 lakh kilolitres of petrol and diesel. According to official estimates, this stock is sufficient to meet local demand for the next two and a half to three months.

"We have no shortage. The supply chain is functioning normally," Mr. Jadaun stated, appealing to the public not to believe in baseless rumours.

Association Labels Crisis Claims 'False'

The Madhya Pradesh Petrol Pump Owners Association also moved to dispel the panic, stating that the reports of a statewide crisis were exaggerated. Association President Ajay Singh clarified that only a small fraction of pumps—roughly 5%—were facing temporary operational issues.

"These are not due to a lack of fuel but due to new advance payment mechanisms with oil companies," Mr. Singh explained. He noted that some operators are in the process of clearing dues and arranging advance payments, causing brief interruptions in supply at isolated locations.

Daily Supply Remains Uninterrupted

Fuel depots in Bhauri, which serve the Bhopal region, continue to dispatch normal volumes to 192 petrol pumps in the city. Data from the Indian Oil, Bharat Petroleum, and Hindustan Petroleum depots indicate a steady outflow of approximately 12 lakh litres of diesel and 9 lakh litres of petrol daily.

The Indore district administration echoed similar assurances, confirming that the supply of petrol, diesel, and domestic cooking gas remains stable and is being regularly maintained.

Officials Urge Calm

Authorities have reiterated that the sudden surge in demand was artificially created by misinformation, not a genuine supply constraint. With over 4,200 petrol pumps across the state and an annual consumption of 1,200 tonnes of petrol and 1,600 tonnes of diesel, officials maintain the network is robust enough to handle regular demand.

As the rumours subside, district collectors have urged citizens to rely only on official channels for information. The administration has confirmed that measures are in place to ensure that normalcy returns to fuel stations across the state within hours.