New Delhi: Selling diesel at Rs 20-25 per liter and petrol at Rs 14-18 per liter as low as Rs 14-18 per litre, due to the fall in prices despite the hike in crude oil prices, representing private fuel retailers like Jio. An industry body with BP and Naira Energy have informed the oil ministry and sought its intervention to create a viable investment environment. On June 10, Federation of Indian Petroleum Industry (FIPI), which apart from private fuel retailers also counts state-owned firms such as IOC, BPCL and HPCL as its members, wrote to the Petroleum Ministry that petrol and diesel But the damage will be limited. Investing in retail business.
International crude oil and product prices rose sharply to a decade-high, but state-owned fuel retailers, which control 90 percent of the market, cut petrol and diesel prices to as high as two-thirds of the cost. rates have been fixed. (Also Read: Petrol, Diesel Prices Fall After Excise Duty Cut, Check Prices In Your City)
This has left private fuel retailers such as Jio-bp, Rosneft-backed Nayara Energy and Shell to either raise prices and lose customers, or reduce sales to cut losses. (Also Read: Gold Price Today, June 19: Gold Prices Decline, Check Prices In Your City)
The retail sale price for petrol and diesel was held for a record 137 days between the beginning of November 2021 and March 21, 2022, despite price hikes.
“With effect from March 22, 2022, the retail selling price was revised on 14 occasions by an average of 80 paise per liter per day, leading to an overall increase of Rs 10 per liter on both petrol and diesel.
“However, the under-recovery (loss) is much higher in the range of Rs 20-25 per liter for diesel and Rs 14-18 per liter for petrol,” wrote Gurmeet Singh, Director General, FIPI.
While retail rates have been stable since April 6, the price of diesel sold to bulk users such as state transport undertakings has increased in line with the rise in international oil prices.
“As a result of this, there has been an increase in the sale of bulk diesel (direct consumer) to the retail outlets, thereby increasing the losses incurred by the private fuel retailers,” the FIPI wrote.
“We seek your immediate support in matters relating to retail sale pricing of petrol and diesel, as all private oil marketing companies, which are investing in retail, are experiencing a difficult investment environment,” it said.
It added that the loss would limit their ability to “operate and expand their network as well as invest further”.
“Stakeholders of private fuel retail companies, namely dealers (including potential dealers), transporters, direct and indirect employees and end consumers also inadvertently bear the impact of under-recoveries,” Singh wrote.
FIPI asked the Ministry to provide some relief to fuel retailers, create a more viable investment environment for private fuel retailers and support the development of the right environment and ecosystem to attract further investment and job creation in the sector. sought intervention.
It said, “The continuing uncertainty in the oil and gas sector and delays in uniform policy implementation such as adherence to free market determined pricing principles, providing access to infrastructure and bringing oil and gas under GST could potentially lead to foreign investors.” may discourage them to invest.
“With no trigger for reduction in the current crude oil and product crackdown, the under-recovery situation will only escalate for fuel retail companies.”
High prices at private company outlets and low sales of some of them led to heavy traffic at PSU petrol pumps in recent days, making some of them out of stock in states like Madhya Pradesh, Rajasthan, Karnataka and Gujarat.
To ensure that private companies do not curtail operations, the government on June 17 expanded the scope of Universal Service Obligation (USO), specifying the sale of petrol and diesel at all petrol pumps, including remote areas, to licensed entities. Made mandatory to maintain for working hours. ,
“The government has now expanded the horizon of USO by including all retail outlets (petrol pumps) including remote area ROs,” the oil ministry said in a statement on Friday.
Thereafter, entities that have been granted retail petrol and diesel licenses will be “obliged to extend the USO to all retail consumers at all retail outlets.”
Failure to comply with the rules may result in the license being revoked.
USO includes maintaining the supply of petrol and diesel during specified working hours and of specified quality and quantity; To provide minimum facilities as specified by the Central Government, the statement said.
Further, maintaining minimum inventory levels of petrol and diesel as specified by the Center from time to time; Providing on-demand services to any person within a reasonable time and on a non-discriminatory basis and ensuring availability of fuel at reasonable prices to the customers is also part of the USO.