Private refiners are selling petrol and diesel at rates lower than their PSU peers, benefiting from soft crude oil prices and imports of cheap Russian crude.
Rosneft-backed Nayara Energy, with more than 6,000 pumps in the country, has reportedly started selling petrol and diesel at Re 1 less than the state-owned retailers — following another private sector peer Reliance Industries and its partner bp plc of the UK.
Jio-bp, the joint venture of Reliance and bp, started selling superior grade diesel at Re 1 per litre less than normal or regular grade diesel sold by the state-owned companies.
The three state-owned firms — IOC, BPCL and HPCL — first froze petrol and diesel prices for 137 days beginning November 2021 when five states went to the polls.
Prices were frozen again from April 6, 2022 as the war in Ukraine intensified — and that has been the case since then with status quo retained even when crude prices were falling globally.
Reports say the PSUs are yet to recoup fully the losses incurred on selling the fuel below cost last year. In the first half of the last fiscal, IOC, BPCL and HPCL had posted a combined net loss of Rs 21,201.18 crore.
During this period, the private fuel retailers lost market share and were forced to close some outlets as they were unable to match the rates of their larger PSU counterparts.
But a fall in international oil prices since March has helped bring their retail prices at par with PSU competition.
With the softening of crude oil prices due to growth concerns coupled with the import of cheap Russian oil, the private sector players are passing on the benefit to customers.
The PTI report quoting a company spokesperson said Nayara Energy has introduced a Re 1 discount in its retail outlets till the end of June 2023 to further stimulate domestic.
Nayara Energy owns India’s second largest single site refinery at Vadinar, Gujarat with a capacity of 20 million tonnes. It is one of the world’s most modern refineries with a complexity of 11.8.
While Reliance-bp is selling only diesel at lower prices, Nayara is doing so both for diesel and petrol.
Brent crude was trading on Tuesday at $73.86 per barrel, down from $82.10 at the beginning of this year.