The price of diesel for bulk consumers has increased by Rs 25 a litre, putting private outlets at risk of closure.
Retailers are losing money since the price of diesel supplied to bulk consumers has increased by around Rs 25 per litre, forcing them to lose money if they sell at the previous price.
According to reports, the price of diesel supplied to bulk users has increased by around Rs 25 per litre in response to a near 40% increase in worldwide oil costs, although retail rates at petrol stations have remained steady.
Petrol pump sales have increased by a fifth this month as large groups of people, such as bus fleet operators and shopping malls, lined up at gas stations to purchase gasoline rather than purchasing directly from oil firms, causing merchants to lose money.
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Private retailers like Nayara Energy, Jio-bp, and Shell have been affected the hardest, refusing to cut down on volume despite an increase in sales. But, according to three individuals with firsthand knowledge of the situation, closing pumps is now a more practical option than continuing to sell additional petroleum at frozen prices for a record 136 days.
Reliance Industries closed all of its 1,432 petrol stations throughout the nation in 2008 after sales plummeted to practically nothing because it couldn’t compete with the discounted prices supplied by the public sector According to them, a similar situation might play out again if merchants’ losses grow due to bulk users being redirected to gas stations.
In Mumbai, the price of diesel for bulk consumers has been raised to Rs 122.05 a litre. This contrasts to the price of the same gasoline at petrol stations, which is Rs 94.14 per litre Diesel costs Rs 86.67 a litre at the fuel pump in Delhi, while it costs over Rs 115 for bulk or industrial customers.
Despite a rise in global oil and fuel costs, PSU oil firms have not hiked retail prices of petrol and diesel since November 4, 2021, a decision regarded as helping the Bharatiya Janata Party (BJP) in importants states assembly election.
The price of diesel for bulk consumers has increased by Rs 25 a litre, putting
After the votes were counted on March 10, prices were scheduled to start aligning with costs, but the commencement of the second part of the Budget Session delayed the price hikes Private fuel retailers such as Nayara Energy, Jio-bp, and Shell were forced to maintain their petrol and diesel prices because they would have lost customers if their rates were higher than those of Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Diesel Price Hindustan Petroleum Corporation Ltd (HPCL) (HPCL).
However, according to sources, PSU retailers have raised prices for bulk customers like as state bus fleets, malls, and airports that utilize diesel to generate backup energy.
Although there are few large-scale or industrial users of gasoline, diesel is frequently employed in industry.
According to them, the large price differential between the bulk user rate and the petrol pump pricing of roughly Rs 25 per litre has led bulk Diesel Price customers to refill at petrol pumps rather than hire tankers directly from oil firms.
Oil corporation’ losses have widened as a results of this, which were already flowing from sellings gasoline and diesel at below-cost price.
While Nayara Energy did not responds to an emails seeking comments, Jio-bp, Reliance’s fuel retail joints venture with bp, said “there is a massive surge of demands at fuel station (retail outlets) due to an increased delta of Rs 25% between retail and industrial price of diesel, leading to heavy diversion of bulk diesel (direct customers) to retail outlets.”
“There is also a significant amount of Diesel Price gasoline being lifted by dealers and B2B and B2C customers who have made advance orders to fill up their tanks and capacity in expectation of an overdue price hike. In March 2022, there were record sales as a result of this sudden rise, placing a pressure on the whole logistics and supply infrastructure “According to a Jio-bp spokeswoman.
This is worsened by a lack of tank trucks and rakes owing to a sudden rise in demand, as well as restricted availability of TT staff throughout the Diesel Price industry over the holiday season, according to the spokeswoman.
Private retailers have not reported sales, Diesel Price while PSU retailers sold 3.53 million tonnes of fuel from March 1 to 15, up 32.8 percent from the previous month. Sales were up 23.7 percent year over year and 17.3 percent from March 1 to March 15, 2019.
Last week, Oil Minister Hardeep Singh Puri Diesel Price said that gasoline sales had climbed by 20% as a result of stockpiling in anticipation of a price hike, but sources claim that sales also surged as a result of bulk customers waiting at petrol stations.
Despite the hurdles, a Jio-bp representative said Diesel Price that Reliance is entirely dedicated to addressing the demands of its retail consumers.
Jio-bp has 1,454 petrol pumps across the nation, whereas Nayara has 6,510. PSUs control 90 percent of the country’s 81,699 fuel stations.
In 2008, government subsidies were granted to PSU merchants for selling gasoline and diesel at below-cost prices, while private retailers were excluded from the program. PSU merchants have been encouraged to balance their losses from inventory increases Diesel Price with the increased refining margins they are currently getting. Private merchant, on Diesel Price the others hand, do not have refineries to compensate for retail losses.