Winning Bizness Desk

Mumbai.Jio-bp, the fuel retailing joint venture involving Reliance Industries, has increased petrol prices by ₹5 per litre and diesel prices by ₹3 per litre, with the revised rates coming into effect on Sunday. This is the first price hike by the company this year. The increase has pushed petrol prices close to ₹110 per litre in Haryana, while diesel rates have also risen sharply. The revised prices vary across states.

At Jio-bp outlets, petrol is selling at around ₹108.54 per litre and diesel at ₹99.19 in Punjab. In Haryana, petrol costs approximately ₹109.80 per litre, while diesel is priced at ₹97.75.

Jio-bp becomes second oil retailer to raise fuel prices

Jio-bp is the second oil marketing company in India to increase petrol and diesel prices in the past 10 days. Earlier, Nayara Energy, backed by Russian oil major Rosneft, raised petrol prices by ₹5 per litre and diesel prices by ₹3 per litre on October 3.

The latest increases come amid rising international crude oil prices and mounting pressure on fuel retailers' margins.

Key developments include:

• Jio-bp has raised petrol prices by ₹5 per litre.
• Diesel prices have increased by ₹3 per litre.
• Nayara Energy announced an identical hike on October 3.

The revised Jio-bp rates took effect on Sunday.

In September, Jio-bp had also restricted diesel sales to 50 litres per transaction. On October 1, Neeraj Mittal, secretary in the Union Petroleum and Natural Gas Ministry, said the government would raise the issue of such restrictions with private refinery companies and ask them to withdraw the curbs.

Nayara Energy raised fuel prices on October 3

Nayara Energy increased petrol prices by ₹5 per litre and diesel prices by ₹3 per litre on October 3, with the revised rates taking effect on Saturday morning. Following the increase, petrol in Bhopal was priced at ₹119.54 per litre, while diesel cost ₹102.64 per litre. The company took the decision to narrow the gap between retail selling prices and rising costs following an increase in international crude oil prices.

Global conflicts disrupt fuel supplies and raise costs

The ongoing tensions in the Middle East and the Russia-Ukraine war have affected global supplies of petroleum products. The disruption has pushed international fuel prices higher, adding to the pressure on oil companies.

Higher global prices have also widened the gap between the cost of procuring and refining fuel and the prices at which it is sold in the domestic market.

Exports offer refiners better returns than domestic sales

With prices in the global market remaining high, Indian refiners can earn better returns by exporting fuel than by selling it at lower prices in the domestic market. According to rating agency ICRA, private companies were incurring losses of around ₹5 per litre on petrol and ₹23 per litre on diesel as of September 9.

The losses have increased further as crude oil prices have crossed $107 per barrel. Reliance-bp had imposed similar restrictions in April, reflecting the continuing pressure on private fuel retailers.

ICRA figures highlight mounting losses for private retailers

The widening gap between international prices and domestic retail rates has made fuel sales increasingly expensive for private companies.

The key figures cited in the report are:

• Petrol losses for private companies: around ₹5 per litre as of September 9.
• Diesel losses for private companies: around ₹23 per litre as of September 9.
• International crude oil prices: above $107 per barrel.
• Jio-bp's latest price increase: ₹5 per litre for petrol and ₹3 for diesel.

Government fuel retailers face mounting customer demand

Restrictions at private fuel outlets have redirected customers towards petrol pumps operated by state-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL). Together, the three public sector oil marketing companies account for 90 per cent of India's retail fuel market. Their extensive network has made them a key source of fuel for consumers as private retailers face pressure from higher procurement costs and tighter margins.

State-owned refiners lose ₹530 crore every day

Union Petroleum Minister Hardeep Singh Puri has said government-owned refiners are losing around ₹530 crore every day because they are selling fuel at prices below their costs. The daily losses underline the financial strain on public sector oil companies, which continue to supply petrol and diesel at domestic prices despite rising international costs.

The latest price increases by Jio-bp and Nayara Energy come against this backdrop of higher crude oil prices, disrupted global supplies and mounting losses for fuel retailers.