Higher bulk diesel prices puts pressure on private refiners

Higher bulk diesel prices puts pressure on private refiners

Autocar Pro News Desk By Autocar Pro News Desk calendar 21 Mar 2022 Views icon4626 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp

Bulk prices of diesel have been hiked by about Rs 25 a litre to align them with the nearly 40 percent increase in international crude rates. The price hike has prompted fleet operators, industrial operators and others who normally buy directly from oil majors to queue up at retail auto fuel stations.

A back-of-the-envelope calculation suggests that while bulk diesel in Mumbai currents stands at 122.05 a litre, its retail price at the fuel stations remains comparatively lower at Rs 94.14 a litre price. Similarly,  In Delhi, the retail cost is about  Rs 86.67 a litre while bulk rates are about Rs 115. 

Buying in bulk from the retail outlet has resulted in a significant  jump in demand for diesel  in March at retail outlets which has put pressure private players such as Nayara Energy, Jio-bp and Shell. The private players have been forced to hold on to their petrol/diesel prices for fear of losing out to retailers from  PSUs such as Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum.

Prices of retail diesel and petrol have not been increased since November 2021. While prices were expected to be increased after the election results came out 10 days ago, the government has not yet made an announcement.

International crude prices had crossed the $ 130 per barrel mark over a week or so ago and have since dipped to just over $ 100.

A PTI report suggests that private oil companies have not curtailed any volume despite a surge in sales. However, considering the fact that fuel rates have been unchanged, retailers claim that it has made the business unviable, prompting them to shut their shops. While Nayara has 6,510 petrol pumps in the country, Jio-bp has 1,454. PSUs control 90 per cent of the 81,699 petrol pumps in the country. The development even has a precedence in Reliance Industries, which had in 2008 closed all its 1432 auto fuel stations after sales dropped to nil it could not match to the subsidized rates offered by the oil PSUs.

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