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Mumbai.Reliance, Nayara restrict fuel sales as crude crosses $107, widening losses amid unchanged domestic prices

Reliance-BP and Nayara Energy have restricted petrol and diesel sales at their outlets as international crude oil prices crossed $107 per barrel while domestic fuel prices have remained unchanged since May. The move has come amid growing losses for private fuel retailers due to the widening gap between global crude prices and retail fuel rates.

According to a Bloomberg report, the restrictions have been introduced as companies face higher costs in the international market. Nayara has capped the quantity of fuel that can be sold to an individual vehicle, while the exact limit imposed by Reliance has not been disclosed.

Nayara limits diesel, petrol sales per vehicle

Nayara outlets are now allowing a maximum of 200 litres of diesel and 30 litres of petrol to be filled in one vehicle. The restriction is also aimed at preventing fuel hoarding. Companies want to stop buyers from filling large quantities of fuel into drums and later selling it at higher prices. Reliance-BP had also imposed similar restrictions in April, according to the report.

Global crude prices rise amid supply disruptions

International crude prices have risen sharply as fuel supplies have been affected by tensions in the Middle East and the continuing Russia-Ukraine war. The disruption in global supplies has pushed crude prices higher, increasing the cost pressure on companies that sell fuel in the domestic market. For Indian refiners, the rise has become particularly significant because domestic petrol and diesel prices have not changed since May.

Private companies face losses on domestic sales

With global fuel prices higher, Indian private refiners are finding it more expensive to sell petrol and diesel in the domestic market at existing retail rates. Selling fuel in international markets has become more profitable compared with selling it domestically at lower prices.

According to rating agency ICRA, private companies were losing around Rs 5 per litre on petrol and Rs 23 per litre on diesel as of September 9. With crude now crossing $107 per barrel, the losses have increased further.

Government pumps see more customers amid restrictions

The restrictions at private fuel stations have led more customers towards outlets operated by state-owned oil companies. Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation together account for around 90% of India's retail fuel market.

The shift has increased the importance of government-owned outlets for customers looking to refuel without the quantity restrictions imposed at some private stations.

State refiners also suffer heavy daily losses

The pressure is not limited to private fuel retailers. Government-owned refiners are also selling petrol and diesel below their costs as domestic retail prices remain unchanged. Petroleum Minister Hardeep Singh Puri has said government refiners are losing around Rs 530 crore every day because fuel is being sold at prices below cost.

The losses have added to the financial pressure on the country's major oil marketing companies.

Truck drivers forced to make frequent fuel stops

The transport sector is among those directly affected by the restrictions on diesel sales. Truck drivers say that lower limits on diesel purchases at private fuel stations are forcing them to stop more frequently to refuel their vehicles. This is affecting both travel time and operating costs for long-distance truck operators.

The impact is particularly visible on vehicles that require large quantities of diesel during long journeys.

Fuel supply concerns deepen as crude remains expensive

The rise in crude prices has created pressure across India's fuel retail market. The country's dependence on imported crude means changes in international prices directly affect the cost of fuel for refiners.

The present situation has also widened the gap between the cost of crude and domestic retail fuel prices.

The key developments are:

• Crude oil has crossed $107 per barrel.
• Petrol and diesel prices have remained unchanged since May.
• Nayara has capped diesel at 200 litres per vehicle.
• Petrol sales at Nayara outlets are capped at 30 litres per vehicle.
• Reliance-BP has also restricted fuel sales, though its exact limit is unclear.

The developments come at a time when both private and government fuel retailers are facing higher costs and pressure on their margins.

Fuel restrictions add pressure on consumers, transporters

For consumers and transport operators, the immediate impact is reduced access to larger quantities of fuel at some private outlets. Truck drivers, in particular, are having to make additional stops to complete their journeys.

The restrictions by Reliance-BP and Nayara reflect the pressure created by rising international crude prices and unchanged domestic fuel rates. With crude above $107 per barrel, private companies are facing increased losses from domestic sales, while government oil companies are also bearing substantial daily losses.

The situation has put India's fuel retailers under growing pressure as they continue selling petrol and diesel at existing domestic prices despite the sharp rise in international crude costs.