By Nidhi Verma
NEW DELHI (Reuters) – Indian bulk diesel buyers are snapping up diesel from retail stations as pump prices are 25 rupees ($0.33) a litre cheaper than their bulk contract prices, a spokesperson for a fuel retail joint venture of Reliance Industries Ltd and energy major BP said.
Indian state-run fuel retailers, who dominate local fuel sales, have not raised pump prices since Nov. 4 despite a surge in global oil and fuel prices, but they have continued to raise prices of direct sales for industrial or bulk clients in line with the terms of those contracts.
“There is a massive surge of demand at fuel stations due to increased delta of 25 rupees a litre between retail and industrial price of diesel, leading to heavy diversion of bulk diesel customers to retail outlets,” said the spokesperson for Reliance BP Mobility Ltd (RBML).
A freeze on revisions to retail fuel prices was seen as aiding Prime Minister Narendra Modi’s Bharatiya Janata Party in crucial state assembly elections. The elections ended on March 10.
Reliance, operator of the world’s biggest refining complex at Jamanagar, supplies some fuels to state-run refiners and also taps the retail market directly through sales at RBML’s fuel stations.
“There is also a very heavy lifting of fuel by dealers and both B2B (business to business) and B2C (business to customers), who have advanced their purchases, to top up their tanks and capacities in anticipation of price increase which is overdue,” the spokesperson said in a statement.
Sales of gasoil, which accounts for about two-fifths of India’s overall refined fuel consumption, surged to pre-pandemic levels in the first half of March, rising by 32.8% from a month earlier. [O/INDIA2]
The surge in diesel sales is putting pressure on the country’s logistics and supply infrastructure, the spokesperson said, adding that Reliance is committed to meeting the demand of its retail customers and its export contracts.
($1 = 76.0500 Indian rupees)
(Reporting by Nidhi Verma; Editing by Hugh Lawson)
