Diesel price for bulk users hiked Rs 25/litre; pvt retailers fear closure

 

The price of diesel sold to bulk users has been hiked by about Rs 25 per litre in line with a near 40 per cent rise in international oil prices, but retail rates at petrol pumps remain unchanged, sources said.

Petrol pump sales have jumped by a fifth this month after bulk users like bus fleet operators and malls queued up at petrol bunks to buy fuel rather than the usual practice of ordering directly from oil companies, widening the losses of retailers.

Worst hit are private retailers like Nayara Energy, Jio-bp and Shell, who have so far refused to curtail any volume despite a surge in sales. But now closure of pumps is a more viable solution than continuing to sell more fuel at rates that have been on freeze for a record 136 days, three sources with direct knowledge of the development said.

In 2008, Reliance Industries had shut all of its 1,432 petrol pumps in the country after sales dropped to almost nil as it could not match the subsidized price offered by the public sector competition.

A similar scenario may unfold again as retailers' losses widen from bulk users being diverted to petrol pumps, they said.

Price of diesel sold to bulk users has been hiked to Rs 122.05 per litre in Mumbai. This compares to Rs 94.14 a litre price of the same fuel sold at petrol pumps.

In Delhi, diesel costs Rs 86.67 a litre at the petrol pump, but for bulk or industrial users it is priced at about Rs 115.

PSU oil companies have not raised retail prices of petrol and diesel since November 4, 2021 despite a surge in global oil and fuel prices, a move seen as aiding the Bharatiya Janata Party (BJP) in crucial state assembly elections.

Prices were supposed to start aligning with cost after counting of votes on March 10, but the ensuing start of the second half of the Budget Session meant that the price increases didn't happen.

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