Consumers are still being forced to tank up with premium or branded petrol and diesel at most pumps, more so if they are driving a premium car or utility vehicle (UV). The government hiked fuel prices last month to bail out the oil companies, but that does not seem to have helped improve the supply situation.

Fuel pumps have stopped selling regular petrol and diesel to premium cars and utility vehicles. Consumers are compelled to buy premium fuel in the absence of adequate supply of normal petrol.

Pump owners claim this is an unofficial directive from the state-owned oil marketing companies to boost sales of branded fuels. Says an IndianOil (IOC) dealer in Mumbai, “We have got directives from the company to sell more branded fuel compared to regular petrol or diesel.”

IOC chairman Sarthak Behuria, at the oil major’s recent AGM, had hinted against sale of subsidised fuels to gas guzzlers as this would only add to its losses. OMCs are likely to lose over Rs 2,11,400 crore during 2008-09 and IOC’s underrecoveries alone are projected at Rs 1,15,110 crore. This is after discounting the fuel price hike as the crude oil has already crossed $140 a barrel, and the price hike was announced when crude was at $123 a barrel.

However, OMCs deny that they have issued such directive to their dealers to force consumers to buy premium fuel. Says a senior IOC official, “We have not issued any directive or asked any dealers to forcefully sell branded fuel to consumers. I just urged them to promote sale of branded products.”

The government, in early June, hiked the petrol price by Rs 4 or 8% a litre. It costs Rs 50.56 a litre in Delhi, Rs 52.20 in Kolkata, Rs 55.88 in Mumbai and Rs 55.07 in Chennai. Similarly, the diesel price was increased by Rs 2 a litre to Rs 34.80 in Delhi, Rs 35.81 in Kolkata, Rs 39.54 in Mumbai and Rs 37.13 in Chennai. Premium fuel costs Rs 5 a litre more as compared to regular fuel.

But consumers are not keen on buying premium fuel. “The sale of premium fuel dipped considerably after the government announced the hike in fuel prices. The dip in premium fuel sales clearly indicates that people could not absorb the higher price of fuel,” said a Mumbai-based analyst.