To save water levels in reservoirs hydel generation has been reduced and power cuts introduced. This has led to the demand for diesel to power diesel generating sets in the city shooting up.

The consumption of diesel in the city touched an all time high of 2,900 kilo litre (KL) on Wednesday as a large number of shops and commercial establishments, shopping malls and industries switched on their diesel generator sets to combat drastic power cuts plaguing the city. This is up by 60 per cent compared to the corresponding day last year.

B Ashok, state level coordinator for oil industry and general manager, Indian Oil Corporation [Get Quote] Limited, said: "We have seen a growth of 25-30 per cent in the consumption of diesel in Bangalore during the first half of July and 11 per cent in June compared to the same months last year."

The situation has worsened in the city in the last couple of days as the public at large have indulging in panic buying and are stocking diesel beyond their requirements.

"There is no need for panic and the public should go back to their normal buying habits as we have enough stock, of eight days, of diesel and petrol in the city," adds Ashok.

For the last few days, there have been long queues at the fuel stations across Bangalore city following the rumour that there is a shortage of diesel. Call centre cabs and industries, in particular, had formed long queues at the fuel stations to buy diesel. Many fuel stations have displayed "no diesel stock" boards and locked up the hand pumps.

The state government has decided to restrict electricity consumption at 100 million units during the month of July in view of poor rains and depleting reservoir levels.

The government is in the process of buying 50 Mw each from Tata and Jindal and another 500 Mw from other states, K S Eshwarappa, minister for power announced in the state assembly on Wednesday.

Bangalore city is facing power cuts for an average of four to five hours everyday. Nearly 60 per cent of Karnataka's electricity requirement is supplied by hydel electricity generating stations in the state.

The three hydel power stations in Linganamakki, Supa and Mani have been generating only 1,498 million units of power currently compared to 5,666 million units last year.