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I: Please calculate the number of petrol pumps in India. Also tell me if their number should be increased.

C: Interesting. I can estimate the number of petrol pumps either by taking the number of vehicles or the population density as a proxy. Which one should I go with?

I:  Whichever you like.

C: I'll take the population route. I have lived in Mumbai, and I remember that my suburb area had around 10 petrol pumps. Since there are around 50 train stations/suburb areas in Mumbai, I'd say there are around 500 petrol pumps in Mumbai. Does this sound good?

I: Yes, it's good so far. Please keep going. 

C:  Mumbai's number could be good representative of petrol pump density for urban populations which is 500 pumps per 20 million people = 25 per million. For rural population, given the lower familial income, the number of private cars would be less, but they would have high energy consuming farming vehicles like tractors. Would it be a good ideas to assume rural demand to be 75% of urban demand?

I: You can take them to be equal.

C: Understood. This makes the calculation easy, 1400 million*25 petrol pumps/million = 35,000 petrol pumps in India, approximately.  

I: Sounds reasonable. Should this number increase? If yes, what metrics would you use?

C: Number of petrol pumps should be increased if either the current demand is not met or if the future demand is growing faster than the growth in petrol pump capacities.

I: How do you know the current demand is not met?

C: We can find that using metrics like the average wait time for vehicles and compare with historic and seasonal baselines to see if areas around particular petrol pumps are underserved.  

I: If the wait time is increasing, would you make a new petrol pump?

C: Not always. Increased wait time would mean a demand-capacity mismatch. Depending on other factors, this can be addressed by increasing more pumps or lanes in existing petrol pumps or building new ones depending on traffic etc.

I:  Okay. Tell me about how would you predict future petrol demand?

C: We can start with first finding the types of customers and their cumulative volume consumption of different petroleum products. 

I: For now, let's just consider private cars.

C:  Understood. We can use the sales of new and used cars to predict the demand of petrol since petrol consumption would lag with car sales. We can also use construction of new roads and highways. 

I: What if we don't have the data for car sales. How would you predict car future car sales?

C: We can use the data on input materials in car production as a proxy. Maybe make a composite metric of steel, rubber and other inputs and see how closely the change their production mimicked car sales. This can give us some insights on future car sales.

I: Alright. We can end the case here. Thank you for the discussion