According to a representative for a diesel retail joint venture of Reliance Industries Ltd and energy company BP, Indian bulk diesel purchasers are picking up diesel from retail stations since pump prices are 25 rupees ($0.33) lower than bulk contract pricing.
Despite a jump in global oil and fuel costs, Indian state-run fuel merchants, which dominate local fuel sales, have not hiked pump prices since November 4, but they have continued to boost rates of direct sales to industrial or bulk clients in accordance with the terms of those contracts.
The increasing differential of 25 rupees per liter between the retail and industrial prices of diesel has resulted in a significant diversion of bulk diesel consumers to retail shops, according to a representative for Reliance BP Mobility Ltd. (RBML).
A halt on retail fuel price increases was perceived as helping Prime Minister Narendra Modi’s Bharatiya Janata Party in important state assembly elections. The election took place on March 10.
Reliance, which operates the world’s largest refining facility at Jamnagar, delivers certain fuels to state-run refineries and also sells directly to the retail market through RBML’s gasoline stations.
Gasoline sales, which account for almost two-fifths of India’s total refined fuel consumption, rose to pre-pandemic levels in the first half of March, up 32.8 percent from the previous month.
The spike in diesel sales is placing strain on the country’s logistics and supply infrastructure, according to the spokesperson, who added that Reliance is dedicated to satisfying the demand of its retail customers as well as its export contracts.