Needs cash for retail outlets; if the finance ministry agrees, banks will have to give about Rs 2.65 billion of smaller denomination notes daily to fuel outlets. India’s ongoing currency crisis has taken a fresh turn, with the petroleum ministry now knocking at the doors of the finance ministry for Rs 50,000 worth of smaller denomination notes to each of the nearly 53,000 fuel retail outlets in the country on a daily basis. This is meant to tide over the currency shortage. If the finance ministry agrees to this, banks will have to give about Rs 2.65 billion of smaller denomination notes to fuel outlets of public sector oil marketing companies in the country every day.
After the announcement by Prime Minister Narendra Modi that Rs 1,000 and Rs 500 currency notes would be demonetised, sales at fuel retail outlets have increased by 15-40 per cent, as the government had allowed these outlets to accept the old currency notes. The move by the petroleum ministry comes after the railways ministry, too, approached the Reserve Bank of India to supply lower denomination notes to the national carrier with immediate effect.
According to multiple sources close to the development, the Dharmendra Pradhan-led ministry has taken this proposal by retailers to the finance ministry. “We have forwarded the proposal by retailers to the finance ministry to provide them with smaller notes or else set up currency exchange centres at every petrol pumps in the country,” said a ministry official, who does not want to be named. The government today extended the date for accepting old denomination notes at petrol pumps and railway stations till November 24 considering the currency crunch faced by common people.
Following a shortage of smaller notes, petrol pumps in the country are accepting refilling of Rs 500 and Rs 1,000 and not giving any change. “Our sales have increased by about 40 per cent on a daily basis since the government’s decision. We have asked the government to disburse Rs 50,000 to every petrol pump or set up currency exchange counters on outlets,” said Ajay Bansal, president of All India Petroleum Dealers’ Association.
India has about 56,190 fuel retail outlets, out of which state-run Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd have about 52,604 outlets. On a monthly basis, each of these outlets sell 170 kilolitre of fuel. “While the customers are demanding changes for higher denomination notes, banks are not giving us small notes. At the same time, our sales have increased from 11 kilo litre to about 20 kl per day after the announcement,” said Rajiv Chadha, owner of a Hindustan Petroleum Corporation outlet at Bahadur Shah Zafar Marg in Delhi.
According to All India Petroleum Dealers’ Association, in many places across the country petrol pump staff is being assaulted and man-handled for smaller denomination notes. In 2015-16, the overall fuel demand zoomed to 183.5 million metric tonne from 165.5 million tonne, compared to the previous financial year. While diesel consumption increased by 7.5 per cent to 74.6 million tonne, gasoline usage rose 14.5 per cent to 21.8 million tonne. Shaq Thompson JerseyShare This