Reliance-BP, Nayara Sell Fuel At Market Rates

Reliance-bp and Nayara Energy in India have started selling petrol and diesel at market prices again. They stopped doing this over a year ago because global oil prices were high and they were losing money. But now that prices have fallen, they can afford to sell at the actual rates.

Reliance BP Mobility Ltd., Nayara Energy and Shell sold petrol and diesel at low prices to compete with public sector retailers. They still lost money even though their prices were a little higher than Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum.

The PSU pump prices are now equal to the cost due to a drop in global oil prices. This information comes from three sources who are familiar with the matter. The drop in prices has lasted for the past six weeks.

Nayara owns lots of petrol pumps in India. They started selling petrol and diesel at market rates in March. RBML has 1,555 petrol pumps and is selling diesel at market rates starting this month.

Oil prices fell this week to $78 per barrel. RBML wants to offer discount of Re 1 per litre at some select petrol pumps. They still charge more than PSU competitors for petrol.

Oil prices have been going down across the world. Some people thought this might mean the price of fuel would go down too, but it looks like that won't happen for a while. Oil companies in India lost money last year by selling petrol and diesel for less than it costs to make. They need to make up that money first before they can lower their prices.

The people in charge said that the public sector retailers haven't lost or gained money on petrol. However, there were some losses when it comes to diesel.

The price of diesel at all Jio-bp outlets is the same as other fuel stations. They either match the prices of public sector undertakings or follow the market price. This information has been given by reliable sources.

Jio-bp sells high performance diesel for Indian vehicles and roads. The diesel has special additives that make it perform better. This helps with fuel economy on Indian roads. Jio-bp offers premium diesel at the same price as regular diesel from PSU pumps.

IOC, BPCL, and HPCL froze fuel prices for 137 days in November 2021 due to state elections. Another pause started on April 6, 2022, and is still ongoing. All three companies are state-owned.

Private retailers reduced retail operations to reduce losses as they couldn't match the cost rates of PSUs. At its height, RBML was losing Rs 700 crore every month. Nayara Energy, backed by Russia's Rosneft, raised petrol and diesel prices by Rs 3 per litre above the PSU rates to cover some of their losses.

Private retailers say that PSU oil marketing companies dominate the market and decide the prices. This leaves no chance for private retailers to fix the retail selling price of petrol and diesel.

Since February 2022, international crude prices have been going up. However, PSUs have not increased fuel prices. This has caused fuel retailers to suffer huge losses, also known as under-recoveries.

At one point, petrol had a cost to retail price difference of Rs 13.08 per litre. Diesel had a difference of Rs 24.09 per litre.

Retailers complained about losing money on fuel sales, but the oil ministry didn't believe them. They said that Reliance was exporting diesel for a lot of money, but not selling it in their own petrol stations.

But someone in the industry says that the ministry's conclusion is wrong.

Reliance has two refineries at Jamnagar in Gujarat. One is just for exports. BP doesn't own any of them.

RBML is a partnership between Reliance Industries and BP. It is a separate company with its own finances. RBML buys fuel from Reliance and other companies. It sells this fuel to 1,555 petrol stations.

He said that it's like suggesting ONGC use their windfall profits from high oil and gas prices to support their subsidiary HPCL in selling subsidized petrol and diesel.

There are 6,386 petrol pumps owned by Nayara Energy in India.

IOC, BPCL, and HPCL companies have 78,501 petrol pumps out of 86,855 in India.

Sources in the industry said that the practices of PSU OMCs go against promoting competition and investing in fuel retailing. This happened after petrol's pricing was deregulated in 2010 and diesel in 2014.

In 2019, the fuel retailing policy eased up. This allowed seven new private retailers to get marketing permission. They can now sell fuel.