New Delhi, March 26 Nayara Energy, India's largest private fuel retailer, on Thursday raised petrol prices by ₹5 per litre and diesel by ₹3 a litre, passing on a portion of the recent surge in global oil prices following the war in the Middle East, sources said.
Indian fuel marketing companies have been facing challenges due to the frozen retail petrol and diesel prices despite a nearly 50 per cent increase in international oil prices since February 28, when the United States and Israel launched military strikes against Iran, triggering a strong response from Tehran.
Nayara Energy, which operates 6,967 of India's 102,750 petrol pumps, has decided to pass on a portion of the increased input costs to consumers, two sources with direct knowledge of the matter said.
Petrol at Nayara pumps now costs ₹100.71 per litre and diesel costs ₹91.31 per litre.
In a statement, the company said that the ongoing disruption in crude oil supplies has created unprecedented challenges in the industry, impacting the distribution and availability of fuel.
"We assure our customers that we are fully focused on meeting India's energy needs by maintaining a consistent supply of high-quality fuels," it said, adding that its petrol pumps continue to operate normally with no service interruptions.
"Furthermore, our refinery turnaround has been meticulously planned and we remain fully equipped to ensure that there will be no shortfall in fuel supplies during this period," it said. "Nayara Energy is committed to being the nation's energy partner and prioritizes operational stability and uninterrupted service for our customers."
Jio-bp, the fuel retailing joint venture of Reliance Industries and BP Plc, which operates 2,185 outlets, has, however, so far not raised prices despite incurring significant losses on the sale of petrol and diesel.
State-owned fuel retailers, who control about 90 per cent of the market, continue to keep rates frozen.
Sources said that while Nayara, majority-owned by Russia's Rosneft, hiked petrol price by ₹5 per litre and diesel by ₹3, the effective rate increase differs from state to state depending on local taxes like VAT. In some places, the increase is as high as ₹5.30 per litre for petrol.
"Private fuel retailers in India receive no government compensation to offset losses from holding back price increases, unlike state-owned firms that are supported for acting as "good corporate citizens"", sources said, adding that mounting losses have left them with little choice but to raise retail prices.
Retail petrol and diesel prices have been frozen since April 2022, with state-run Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) absorbing losses when crude prices are high and making profits when rates are low.
The three retailers last week hiked the price of premium or higher-grade petrol by ₹2 per litre and the rate of bulk diesel sold to industrial users by about ₹22 per litre.
However, the price of normal petrol and diesel remains unchanged.
Premium 95-Octane petrol price in Delhi has been increased from ₹99.89 per litre to ₹101.89. Alongside, bulk or industrial diesel prices were hiked from ₹87.67 per litre to ₹109.59 in the national capital.
International oil prices touched USD 119 per barrel earlier this month on intensifying Iran war, before pulling back to around USD 100 a barrel.
A litre of normal petrol in Delhi continues to cost ₹94.77 while the same grade diesel comes for ₹87.67 a litre.
Normal petrol typically has an octane rating of 91-92 and is suitable for standard engines, offering adequate performance for everyday driving. Premium petrol, on the other hand, has a higher octane rating of 95-98, making it ideal for high-performance or high-compression engines.
The government has maintained that petrol and diesel are deregulated commodities whose pricing is independently decided by oil marketing companies.
India imports 88 per cent of its crude oil needs and roughly half of its natural gas requirement. These mostly come via the Strait of Hormuz. Following the US and Israeli attacks on Iranian government, military and nuclear facilities, Iran warned shipping away from the strait, and insurers withdrew coverage, effectively halting tanker movements.
Prices had risen to USD 119 per barrel in June 2022 in the aftermath of Russia's invasion of Ukraine. That year, oil companies had nominal profits, but in FY24, they posted record ₹81,000-crore profit, helping make up for past dent in margins.
This year, the three companies have posted ₹23,743 crore profit in the December quarter alone.