Price cuts by pvt fuel chains hit PSU peers

Private fuel retailers are cutting prices and eating into the market share of their public sector peers, passing on the benefit of cheaper Russian crude oil to their customers.

- Rituraj Baruah

While government-owned oil marketing companies (OMCs) that dominate fuel retailing in India have not touched prices since March 2024, Jio-BP and Nayara, which together control 97% of private fuel retail, have cut prices by as much as ₹5 in some regions.

Apart from retail price cuts, private fuel sellers are also offering discounts on bulk purchases of petrol and diesel. Dealers operating pumps of OMCs said that discounts offered by private refiners, in turn, have eroded the market share of Indian Oil Corp. Ltd (IOCL), Hindustan Petroleum Corp. Ltd (HPCL) and Bharat Petroleum Corp. Ltd (BPCL), with private firms emerging as dominant players in several two-tier cities. "The most impacted states are Gujarat, Maharashtra and Uttar Pradesh. Reliance (Jio-BP) started with a Happy Hour scheme where it provided discounts of up to 5 per litre during a certain time period, followed by a similar offer by Nayara. This, however, is restricted to some pockets and retail outlets. So, on an average, the discounts across their retail chain may be around 1-2 per litre," said Nischal Singhania, president of Delhi Petrol Dealers Association (DPDA). Jio-BP had kicked off price cuts with a "₹3 per litre discount on petrol in October.

Queries sent to Nayara, Reliance Industries, Shell, IndianOil, BPCL and HPCL remained unanswered till press time.