With public sector oil companies continuing to pump in additional stocks, the rush for fuel in Hyderabad showed on Thursday signs of abating after almost two days but not before bringing to the fore certain practices and limitations.
Though oil companies and government attributed the rush to panic buying by customers, those in the know said discontinuation of supplies by the former on credit to dealers and the trade practice of promoting sales by extending credit to bulk buyers played a major role.
Be it the Covid pandemic, the Russia-Ukraine war or the nearly month old war in West Asia, the oil companies during crises in recent years not only stopped supplying products on credit to the dealers but also insisted on the settlement of the dues, Telangana Petroleum Dealers Association president M. Amarender Reddy said.
Payment in advance is the norm now, he said, explaining that the change makes it difficult for dealers, especially considering that a portion of the diesel sales, to bulk consumers such as truckers, construction companies and even cab firms is on credit. For dealers, credit sales is a way to boost volumes sales though not all the customers end up clearing the dues within the unwritten 15 days that is agreed initially. About 40% of total diesel sales will be on credit, he said, adding petrol is always dispensed on a cash and carry basis.
