Bulk diesel price up Rs 14.6/litre as crude surge squeezes oil cos’ margins

Nayara Energy raises petrol and Diesel amid West Asia war.

NEW DELHI: Oil marketing companies have increased the price of bulk diesel by Rs 14.6 per litre, while private retailer Nayara Energy has raised pump prices of petrol and diesel by Rs 5 and Rs 3 per litre respectively, as elevated crude prices have started hurting their margins.Nayara Energy now sells petrol at Rs 108 a litre in Haryana, while diesel is priced at Rs 98.84. Fuel prices vary between states due to differences in tax structures. Nayara Energy operates 7,108 petrol pumps across India.Bulk diesel, used by commercial, industrial and institutional customers, is now priced at Rs 153.57 per litre, up from Rs 138.97 in Sept. The price of bulk diesel reflects the actual market price of the fuel and is aligned directly with international product benchmarks. In contrast, the price of diesel and petrol for automobiles sold at retail outlets run by public sector oil marketing companies is regulated by govt and currently frozen at Rs 95.64 and Rs 102.12 a litre, respectively, in the capital.Global benchmark Brent traded at $102.25-a-barrel on Friday for Dec contracts, Indian basket of crude, last updated on Sept 30, was priced at $117.28 per barrel.Petroleum dealers said the substantial price difference of Rs 57.93 per litre between retail and bulk diesel has already prompted some commercial and industrial customers to buy their supplies from retail outlets. “There is a spike in our sales of diesel since the price of bulk diesel was revised. But we don’t have a means to differentiate commercial and industrial buyers from retail customers. The more diesel we sell, the more losses oil companies will incur,” said Monty Sehgal, spokesperson for the Federation of All India Petroleum Association.While there are reports of private retailers rationing diesel sales to customers following increased buying by commercial users to keep their losses in check, PSU retailers said they cannot take such decisions. An executive of an oil marketing company said any surge in sales through retail outlets would be known only in a week or 10 days.Following directions from govt, state-run oil retailers had introduced a cap of 200 litres per customer during the West Asia war, when crude supplies were disrupted, prices had surged and industrial and commercial customers started buying from retail outlets because of the price difference. The cap was subsequently removed.