New Delhi: Private refiner Nayara Energy raised petrol prices by ₹5 a litre and diesel by ₹3 a litre on Thursday — becoming the first oil marketing company to revise auto fuel rates since the West Asia conflict began — while the petroleum ministry moved on the same day to refute claims circulating on social media that India had only six days of fuel stocks remaining, asserting the country has approximately two months of supply secured. Panic buying broke out across several states for a second day on Thursday. (PTI/ Representative)
The developments came as the West Asia conflict has lasted nearly four weeks, a period in which there has been mounting stress on global energy supplies, prompting anxiety among consumers in some parts of the country.
Panic buying broke out across several states for a second day on Thursday. In Gujarat, fuel sales rose four to five times since Monday, the state government said, with long queues reported at filling stations in Ahmedabad, Rajkot, Surat and Gandhinagar. Serpentine queues were also seen in Kashmir, parts of Karnataka, Uttar Pradesh and Goa, where officials and ministers reiterated that there was no shortage.
Nayara, which operates approximately 7,000 petrol pumps and is the country’s largest private fuel retailer, said its network “continues to operate normally, with no interruptions in service.”
Benchmark Brent crude was trading at $106.98 a barrel on Thursday evening, up approximately 47% from $72.87 before the conflict began on February 28.
Prices of retail petrol and diesel sold by state-run Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) have been frozen since prices April 2022, although the three last week hiked the price of premium or higher-grade petrol price by ₹2 per litre and the rate of bulk diesel sold to industrial users by about ₹22 a litre.
“As consumers of petrol and diesel are highly price sensitive, raising fuel prices even marginally would chase them away to nearby retail outlets of other companies where rates are low. This is an intelligent way to minimise losses by selling less without shutting outlets. The burden of losses will, however, shift to other firms, particularly public sector OMCs, because of their market dominance and their inability to raise prices at will,” said an industry analyst, requesting anonymity.
He, however, justified the private firm’s move on the grounds that while the government often compensates public sector OMCs for their losses from the budget, private companies have to bear the losses in their books.
IOC, BPCL and HPCL — together control over 90% of India’s fuel retail market across approximately 101,470 outlets nationwide. Among other private retailers, Jio-BP, which operates over 2,000 pumps, has maintained current prices; its mobility stations are “fully operational and adequately stocked,” the company told HT. Shell India, with around 350 outlets, has historically priced above PSU OMC rates.
All refiners are currently losing at least ₹25 per litre on petrol and diesel sales, three executives said, requesting anonymity.
“As the [West Asia] conflict nears one month, its impact on Indian downstream players is becoming more visible, with petrol-diesel marketing margins of OMCs turning negative, at - ₹25/45 per litre this fortnight,” Sabri Hazarika and Arya Patel of Emkay Global Financial Services wrote in a research note.