Oil marketing companies (OMCs) on Sunday hiked the price of diesel by about Rs 25 per litre, making the fuel significantly more expensive for bulk consumers such as malls, factories and the railways compared to retail consumers as oil refiners face elevated prices of crude oil. The price of Brent crude has risen about 43 per cent since the beginning of the year to $111.4 per barrel up from $78.11 per barrel. India imports about 85 per cent of its crude oil requirements. 🗞️ Subscribe Now: Get Express Premium to access the best Election reporting and analysis 🗞️ What is the difference in the prices of diesel for bulk and retail buyers of diesel? The price of bulk diesel is now about Rs 25 per litre higher than that of diesel at retail points of oil marketing companies across the country. In Mumbai, the bulk price of diesel has been hiked to Rs 122 per litre compared to Rs 94.14 per litre at retail points in the city, according to sources at oil marketing companies. State-owned OMCs Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd. have held the retail prices of petrol and diesel constant since November 4 last year despite a sharp increase in global crude oil prices. Ordinarily, the price of petrol and diesel are revised daily in line with international prices of petroleum products. According to analysts, OMCs are currently facing significant losses on the sale of both petrol and diesel. What will be the impact of the hike in the price of bulk diesel? Key bulk buyers of diesel like the Indian railways, malls, transport companies and factories will face significantly higher prices than retail consumers. Industry has noted that the move to hike bulk diesel prices will incentivise bulk consumers to source fuel at retail points. “There is a massive surge of demand at fuel stations (retail outlets) due to increased delta of ~ Rs 25/ltr between Retail and Industrial price of diesel, leading to heavy diversion of Bulk HSD (Direct Customers) to retail outlets. There is also a very heavy lifting of fuel by dealers and both B2B & B2C customers, who have advanced their purchases, to top up their tanks and capacities in anticipation of price increase which is overdue.” said a spokesperson of Reliance BP Mobility Ltd (RBML) which operates over 1380 retail fuel outlets across the country. Sources at RBML confirmed that it had reduced the supply of both petrol and diesel at retail points as it was facing losses on the sales of both products. When the price of crude oil had hit record highs in 2008, Reliance was forced to shut fuel retail operations as it was not able to match the subsidised prices offered by state owned OMCs. Union Minister for Petroleum and Natural Gas Hardeep Singh Puri confirmed last week that the consumption of petroleum products had increased sharply in anticipation of fuel price hikes. Newsletter | Click to get the day's best explainers in your inbox
