The three private operators together held 2.3% of the domestic retail diesel market in July, compared to 2.9% in June and 10.6% in July 2021, according to data obtained from oil companies. Their share in gasoline fell to 5% in July from 5.6% in June this year and 9.8% in July last year.
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This resulted in increased sales and unwanted market share gains for state refiners at a time when fuel prices were artificially static. In July, state refiners held a combined share of 95% in gasoline and 97.7% in diesel. A year earlier, their share was 90.2% gasoline and 89.4% diesel.
The large and sudden shift in demand for pumps from private players to state-owned companies caused great inconvenience to customers in some places over the summer while adding to the losses that state-owned companies were already suffering from the freeze. retail prices.
Bharat Petroleum and , the state-run retailers, reported a combined loss of Rs 18,500 crore in the April-June quarter.
Private players blamed the price freeze for the drop in sales. “Our sales have been impacted in recent months as the retail price of gasoline and diesel has not kept up with international benchmarks. That said, the price of oil and product cracks have been falling lately, allowing us to regain market share, particularly in the case of gasoline where margins are now positive,” Nayara Energy told ET.
and did not respond to requests for comment.
What has accentuated the difficulties of state refiners is the strong demand for fuel in the country. Retail gasoline and diesel sales rose 6.9% and 17.6% in July year on year.
The unusual rise in diesel retail sales is also due to industrial customers switching to gas pumps for cheaper fuel. In many cases, oil companies have pushed for change for fear of losing industrial customers to rival retailers, industry executives said.
Diesel sold directly to industrial customers fell 54% in July from a year earlier. In June, the decline was 44%. In July 2021, direct diesel sales to wholesale buyers accounted for 13% of total diesel consumption in the country. In July this year, the share fell to 5.5%.
Oil companies sell directly to industrial customers at a lower price than retail, but in recent months bulk supplies have been much more expensive than fuels available at the pump.
Sales by private players to large buyers also fell nearly 60% year on year in July, with their market share falling to 10.7% from 11.9% in July 2021.
In early July, the government had imposed an exceptional tax of Rs 6 per liter on the export of petrol and Rs 13 per liter on diesel. He also ordered refiners to sell on the domestic market at least 30% of the diesel and 50% of the gasoline they export. On July 20, the petrol export tax was removed and reduced to Rs 11 on diesel. The diesel tax was further reduced to Rs 5 per liter this month.
Private refiners are responsible for 80-85% of the country’s fuel exports. They also sell to state-run fuel retailers at international prices. Anything they sell to state enterprises also counts as domestic sales for private refiners.