Nayara Energy, India’s largest private fuel retailer, has increased petrol prices by Rs 5 per litre and diesel prices by Rs 3 with immediate effect, people familiar with the matter said. The price revision comes as international crude oil and refined-product prices rise.
The new rates took effect from the early hours of Saturday at Nayara’s 7,108 fuel stations across India. The company did not respond to an email seeking comment.
Nayara had earlier raised petrol and diesel prices by the same amounts on March 26 after the Iran conflict disrupted energy supplies. It later withdrew the increase on July 1 after crude prices fell as tensions in West Asia eased.
The latest revision marks a fresh attempt by the private retailer to reduce the gap between pump prices and its rising costs.
State-owned fuel retailers—including Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation—control more than 90% of India’s 1,04,137 petrol pumps. These companies have generally kept retail fuel prices stable despite fluctuations in global crude prices.
The government said on October 1 that private retailers should not restrict petrol and diesel sales at their outlets. Nayara and Jio-bp had limited fuel volumes at some pumps amid losses on retail sales.
Officials said the difference between retail and bulk diesel prices had prompted industrial consumers to purchase cheaper fuel from retail outlets, increasing pressure on supplies.
Jio-bp, a fuel retail joint venture between Reliance Industries and UK-based bp, operates 2,304 petrol pumps. It has not changed petrol or diesel prices so far.
Rating agency Icra estimated last month that oil marketing companies were facing negative marketing margins of about Rs 8 per litre on petrol and Rs 9 per litre on diesel in September.
The agency said oil marketing companies were losing around Rs 530 crore a day across petrol, diesel and LPG as higher crude prices and unchanged domestic fuel rates affected their profitability and cash flows.
Icra said the combined refining and marketing operations of oil marketing companies break even when crude prices are between $85 and $90 a barrel. Without corresponding retail price increases, higher crude prices could lead to marketing losses.
Nayara operates a 20-million-tonne-a-year refinery at Vadinar in Gujarat and has more than 7,000 fuel stations across the country.
The latest increase could widen the price gap between private and state-owned fuel outlets. If other retailers also raise prices, higher fuel costs could affect freight charges, operating expenses, household inflation and fuel demand.
with PTI inputs
