6 hrs ago
Government Rejects Private Fuel Retailers’ Sales Caps
Some private fuel stations in India limited how much diesel customers could buy.
The government said these limits are not allowed when imposed on their own.
Jio-bp limited some customers to 50 litres per day.
Nayara Energy used limits ranging from 70 to 200 litres per customer.
Large businesses were buying cheaper retail diesel because bulk diesel cost much more.
This created pressure on fuel supplies at some stations.
Private retailers also said selling fuel at retail prices was causing negative margins.
Public fuel companies have kept petrol and diesel prices unchanged since May, even as their costs rose.
The government had previously imposed its own temporary limits and directed industrial buyers to designated bulk-sales points.
Petroleum Secretary Neeraj Mittal said private retailers cannot unilaterally cap petrol or diesel sales.
Jio-bp capped diesel sales at 50 litres per customer daily at some outlets, while Nayara Energy’s caps ranged from 70 to 200 litres.
The government said it would engage private retailers and reiterated that fuel-sale limits are unacceptable.
A gap of up to Rs 50 per litre between retail and bulk diesel prices has encouraged large consumers to buy fuel from retail pumps.
Public-sector retailers are absorbing heavy losses after keeping retail fuel prices unchanged since May, with ICRA estimating daily marketing losses of about Rs 530 crore.
- Who
- The Petroleum Ministry, Petroleum Secretary Neeraj Mittal, Petroleum Minister Hardeep Singh Puri, and private retailers Jio-bp and Nayara Energy.
- What
- The government said unilateral limits on petrol and diesel sales at retail outlets are unacceptable and will be addressed.
- Where
- At fuel retail outlets in India.
- When
- The comments were made Thursday; the article also refers to a government order issued on June 12 for 90 days.
- Why
- Private retailers cited pressure on retail fuel stocks and negative margins, while large consumers were buying cheaper retail diesel because bulk prices were higher.
Government Position
Private Retailers’ Rationale
Sales limits
Government Position
The government says retailers cannot impose unilateral caps on petrol or diesel sales and plans to tell private companies that such limits are unacceptable.
Private Retailers’ Rationale
Private retailers imposed limits at some outlets because unusually large purchases were putting pressure on local retail fuel stocks.
Retail fuel economics
Government Position
The government expects fuel retailers to continue operating within the rules and has remained in contact with private companies.
Private Retailers’ Rationale
Private retailers said negative margins on retail fuel sales make bulk sales, sales to other retailers, and exports more attractive.
Bulk buyers at retail pumps
Government Position
The government has directed bulk and industrial consumers to use designated bulk-sales points rather than retail outlets.
Private Retailers’ Rationale
Retailers and sources said large consumers were shifting to retail pumps because diesel there was much cheaper than bulk diesel, with some purchases reaching 600 litres at once.
Key facts
- Government position
- No retailer is allowed to unilaterally cap fuel sales, according to Neeraj Mittal.
- Jio-bp limit
- Some outlets capped diesel sales at 50 litres per customer per day.
- Nayara Energy limit
- Some outlets used daily customer caps ranging from 70 to 200 litres.
- Retail-bulk price gap
- The difference between retail and bulk diesel prices was reportedly as high as Rs 50 per litre.
- Public-sector losses
- ICRA estimated daily fuel-marketing losses of about Rs 530 crore for public-sector retailers.
- Private-sector market share
- Private fuel retailers account for less than 10% of India’s fuel retail network.
- Earlier government order
- On June 12, the government limited diesel sales at public-sector retail outlets to 200 litres per consumer per day for 90 days.
Quotes
Neeraj Mittal
Petroleum Secretary who addressed the government’s position on private fuel retailers’ sales limits
“Nobody is allowed to put a cap on fuel sales. If they are putting a cap on sales, we will take it up. We will tell them that it is not acceptable, it is not done.”
indianexpress.com
Sources
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