The government's measures to restrict diesel purchases through petrol pumps has raised concerns in hospitals, IT campuses, data centres and industrial facilities that depend heavily on diesel generators used both as emergency backup and as a regular source of power during peak-demand periods.
On June 11, the government prohibited industrial, commercial and institutional consumers from buying diesel at petrol pumps and limited sales via retail outlets to 200 litres per customer or vehicle per day. This directive is aimed to conserve supplies and prevent diversion of fuel meant for retail consumers.
These restrictions could disrupt fuel procurement for sectors where diesel generators remain essential for operations, an industrial executive told news agency PTI.
Among the industries, hospitals remain the most vulnerable, according to a report by the news agency. Large healthcare facilities usually maintain several diesel generator sets capable of powering entire campuses during grid disruptions and often run them proactively during surgeries, intensive-care operations and other critical procedures where even momentary voltage fluctuations can pose risks to patients.
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"Many hospitals do not depend exclusively on grid electricity for critical functions. Diesel generators are an integral part of operational planning because uninterrupted power is non-negotiable," an executive at a hospital chain was quoted in the report.
In addition to hospitals, data centres, IT parks and telecom facilities rely heavily on diesel-driven backup systems to meet their commitments. As per industry officials cited in the report, many facilities continously top up diesel inventories from nearby fuel stations to ensure uninterrupted services.
"Peak hour power tariffs in some states are higher than the cost of generating electricity using diesel gensets. And so many IT companies rely on diesel gensets to meet power demand during peak hours," another industry executive told the news portal.
Apart from operational disruptions, these curbs could also hike operating costs for some industrial and commercial consumers. During periods of peak electricity demand, power bought from the grid can become significantly more costly than captive diesel generation, prompting some facilities to switch part of their load to generator sets to manage costs and maintain reliability.
According to the the government said the measures were initiated due to "abnormal increases" in diesel and petrol sales at retail outlets as industrial and institutional consumers shifted purchases from bulk supply channels to lower-priced retail pumps, creating risks of local shortages.
As per the order, such consumers will be required to source fuel through dedicated consumer pumps and bulk supply arrangements rather than retail outlets.
Industries are seeking exemptions and operational clarifications for essential services, noting that hospitals, telecom networks, data centres and other critical infrastructure need assured access to diesel supplies despite the prevailing market conditions. Organisations with established bulk fuel contracts are likely to face limited disruption, but institutions that heavily dependent on flexible retail purchases may need to rapidly overhaul procurement practices if the restrictions come into effect, executives told PTI.
These curbs, expected to be in place for up to 90 days, follows abnormal demand growth, especially for diesel, in some pockets after bulk users started buying fuel from petrol pumps due to the pricing difference. While diesel at petrol pumps is priced at nearly Rs 95.20 a litre in Delhi, bulk sale costs at Rs 134.50.
This difference comes as state-owned oil companies modulated retail prices to insulate common users from the spike in cost that followed the West Asia crisis in late February. While bulk users such as telecom towers and industries using diesel for power generation and other feedstock needs are charged market price, the retail pump rates are way lower than cost.
(With inputs from PTI)
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