The cost for diesel in bulk is around 25 rupees per liter more than diesel purchased at the retail locations of oil marketing firms across the nation.
OMCs (Oil Marketing Companies) (OMCs) have on the weekend increased the cost of diesel by approximately 25 cents per liter, making diesel significantly more expensive for large-scale consumers like factories, mills, and railways than retail customers because refiners are faced with higher costs for crude oil. The cost for Brent crude has increased around 43 percent since January 1 and is now $111.4 per barrel from $78.11 per barrel. India imports 85 percent of its oil needs.
What is the difference between diesel prices for retail and bulk diesel buyers?
The cost of diesel in bulk is approximately 25 cents more per liter than diesel purchased at retail outlets of oil marketing firms across the nation. In Mumbai, the price of the bulk of diesel has been increased to Rs 122 per liter, compared to 94.14 each liter for retail outlets in Mumbai, as per sources from oil marketing firms.
The state-owned OMCs owned by the state Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd., and Hindustan Petroleum Corporation Ltd. have kept the prices of diesel and petrol constant from November 4, this year, despite a dramatic rise in the global price of crude oil. Normally, diesel and petrol prices are adjusted every day following the global prices for petroleum products. According to experts, OMCs currently face substantial losses in diesel and petrol sales.
What is the effect on the cost of bulk diesel?
The biggest bulk diesel consumers such as the Indian malls, railways, factories, and transport companies will be paying significantly more than retail customers. Industry experts have noted that the decision to increase prices on bulk diesel will motivate bulk buyers to purchase fuel at retail outlets.
“There is a significant increase of demand at the fuel stations (retail outlets) due to the increase in price differential of around 25 Rs/ltr between the industrial and retail prices of diesel. This has resulted in the heavy diverting of bulk HSD (Direct Customers) to retail outlets. It is also very massive lifting of fuel by dealers and B2B and B2C customers who have accelerated their purchases to fill up their capacity and tanks in anticipation of a price hike that is long overdue.” According to a spokesperson for Reliance BP Mobility Ltd (RBML), which operates more than 1380 fuel stations for retailers nationwide.
The sources within RBML confirmed that the company has cut down on the availability of petrol and diesel at retail outlets as it was suffering losses in selling both of the products. The price of crude oil hit record levels during 2008. Reliance had to close its retail outlets for fuel because it could not meet the prices that were subsidized by OMCs owned by the state.
