Pvt retailers seek Centre’s intervention on fuel prices

NEW DELHI: Selling diesel at

₹20-25 a litre below cost and petrol at ₹14-18 per litre below cost, as a result of a price freeze despite soaring crude rates is unsustainable, an industry body representing private fuel retailers like Jio-bp and Nayara Energy has told the oil ministry and has sought its intervention to create a viable investment environment.

On June 10, the Federation of Indian Petroleum Industry (FIPI), which besides private fuel retailers also counts stateowned firms such as IOC, BPCL and HPCL as its members, wrote to the petroleum ministry

saying losses on petrol and diesel will limit further investments in retailing business.

International crude oil and product prices have risen sharply to a decade high but state-owned fuel retailers, who control 90% of the market, have frozen petrol and diesel prices at rates equivalent to two-third of the cost.

This has left private fuel retailers like Jio-bp, Rosneft-backed Nayara Energy and Shell to either raise prices and lose customers, or to curtail sales to cut losses.

Retail selling prices for petrol and diesel were held for a record 137 days between early November 2021 and March 21, 2022, despite soaring prices.

“With effect from March 22, 2022, the retail selling prices were revised on 14 occasions at an average of 80 paise per litre per day, leading to an overall increase of ₹10 per litre on both petrol and diesel.

“However, the under-recoveries (losses) continue to be very high in a range of ₹20-25 per litre for diesel and ₹14-18 per litre for petrol,” FIPI director general Gurmeet Singh wrote.

While retail rates have been on a freeze since April 6, the price of diesel sold to bulk users like state transport undertakings increased in line with the rise in international oil prices.

“This resulted in rapid diversion of bulk diesel (direct consumers) sales to retail outlets amounting to widening of losses incurred by private fuel retailing companies,” FIPI wrote.