CHENNAI: What began as a fuel shortage has now escalated into a wider crisis, with multiple LPG dispensing stations across Tamil Nadu shutting down operations amid disrupted supply, pricing imbalances and an increasingly fragile distribution network.
In Chennai, the impact is quite evident. With several bunks either closed or operating intermittently, autos continue to queue up at the few outlets that have stock. Across locations, operators said bunks have remained closed for months due to the absence of fresh stock. A representative of Shri Jayalakshmi Fuels in Avadi said, "Our last sale was on March 11. After that, no load has come. Even our vehicle has been waiting at the Sriperumbudur plant for a week, but we still haven't received a supply."
He added that the issue is not limited to a single outlet. "Our brand operations were largely shut across Tamil Nadu. Only recently, supply has started picking up in a few districts like Tiruchy and Tirunelveli," he said.
Operators attribute the shutdowns to a breakdown in distribution. Muthusamy, an LPG bunk operator from Kodungaiyur, said most private outlets rely on larger suppliers such as Indian Oil through tie-ups to procure stock "Big companies are not supplying smaller dealers anymore. They are prioritising their own outlets because their own supply is low, " he said. He pointed to irregular imports as a key trigger. The disruption has meant that even when stock arrives, it is concentrated among a few players with storage capacity, while smaller outlets remain dry.
The scale of the supply reduction is significant. Murugan, an operator in Tiruvannamalai, said his bunk remained shut for nearly a month after no LPG was available at all. While supply resumed about a week ago, it remains sharply curtailed. "A full load is about eight tonnes. Now we are getting only around two tonnes," he said.
Storage constraints further widen the gap between larger and smaller operators. Unlike companies with bulk storage facilities, many dealers depend on periodic loads to sustain sales. In Avadi, the dealer said their tank capacity allows for about 16,700 litres per load, but with no replenishment since March, the bunk has remained idle.
Pricing dynamics have compounded the crisis. Dealers said the procurement price has risen to around Rs 95 per kg, while government-linked outlets sell at approximately Rs 84 per kg, making it difficult for private players to operate without incurring losses. "If we buy at a higher rate and sell lower, it becomes a loss. That is also why supply is not moving, " the Avadi dealer said.
Muthusamy also pointed to a widening gap between government and private pricing, with private outlets selling above Rs 100 per kg in some cases, driving customers away. "When there is a difference of Rs15 to Rs 20, people won't come to private bunks," he said, adding that some dealers are also holding back purchases, anticipating price corrections to avoid losses.