Assam is facing fuel scarcity at retail outlets despite refineries operating at full capacity with adequate petrol and diesel stock. The issue arises because refineries supply fuel to Oil Marketing Companies (OMCs), not directly to consumers, creating a gap in distribution.
OMCs are reluctant to procure sufficient fuel as refinery transfer prices are linked to high global rates, while retail prices remain controlled by the government. This leads to financial losses for OMCs, prompting reduced lifting of stock. Panic buying by consumers further worsens the shortage, causing disruption at petrol pumps.
APSC Relevance: Important for energy economics, fuel pricing mechanism and supply chain issues in India.
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