Reliance and Nayara limit petrol and diesel sales:Oil prices surge past $107; Nayara restricts diesel sales to 200L

Private companies such as Reliance-BP and Nayara Energy have limited petrol and diesel sales because of expensive crude oil and unchanged retail prices. This was claimed in a Bloomberg report. The report said that crude oil prices in the international market had reached $107 per barrel, but prices at petrol pumps had not changed since May. As a result, the companies are incurring losses. According to the report, the company wants to prevent hoarders from filling drums with fuel and selling it at higher prices. At Nayara’s outlets, a maximum of 200 litres of diesel and 30 litres of petrol is now being dispensed into a vehicle. It is not clear how much Reliance has restricted sales. Russia-Ukraine War and Middle East Tensions Reduce Supply Ongoing tensions in the Middle East and the Russia-Ukraine war have adversely affected petrol and diesel supplies worldwide. The supply crisis has led to a sharp rise in prices internationally. Companies Benefit from Exports but Incur Losses When Selling Domestically With prices higher in the global market, it has become more profitable for Indian refineries to export oil abroad than to sell it at lower prices in the country. According to rating agency ICRA, as of 9 September, private companies were incurring losses of around ₹5 per litre on petrol and ₹23 per litre on diesel. The losses have now increased as crude oil prices have crossed $107. Earlier, Reliance-BP had imposed similar restrictions in April as well. Government companies losing ₹530 crore a day Following the restrictions at private pumps, customers are now turning to the petrol pumps of government-owned companies such as Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL). The three companies account for 90% of the country’s retail fuel market. According to Union Petroleum Minister Hardeep Singh Puri, government refineries are incurring losses of around ₹530 crore a day because they are selling fuel below cost. Truck drivers having to stop repeatedly to refuel with diesel The transport sector is bearing the biggest impact of the restrictions on sales. Truck drivers say that, because the quantity of diesel allowed per vehicle at private fuel stations has been reduced, they have to stop repeatedly to refuel their vehicles. This is increasing both their travel time and costs.