Nayara Energy Adjusts Fuel Prices Amid Global Oil Surge: What You Need to Know
Nayara Energy Increases Fuel Prices
New Delhi: Nayara Energy, recognized as India's largest private fuel retailer, has announced a price hike for petrol by Rs 5 per litre and diesel by Rs 3 per litre. This adjustment comes in response to the recent spike in global oil prices, which has been influenced by ongoing conflicts in the Middle East, according to industry sources.
Fuel marketing companies in India have faced challenges as retail prices for petrol and diesel remained unchanged despite a nearly 50% increase in international oil prices since February 28, when military actions by the United States and Israel against Iran began, prompting significant retaliation from Tehran.
Nayara Energy, which operates nearly 7,000 of India's petrol stations, has opted to transfer some of the increased input costs to consumers, as confirmed by two sources familiar with the situation.
A spokesperson for the company has not yet provided any comments regarding this development.
In contrast, Jio-bp, a joint venture between Reliance Industries and BP Plc, which manages around 2,185 outlets, has not raised its prices despite facing substantial losses on fuel sales.
State-owned fuel retailers, which dominate approximately 90% of the market, have kept their prices unchanged.
Sources indicate that while Nayara has increased petrol prices by Rs 5 and diesel by Rs 3, the actual price rise varies by state due to local taxes such as VAT. In some regions, the increase can reach Rs 5.30 per litre for petrol.
Private fuel retailers in India do not receive government support to mitigate losses from delaying price hikes, unlike state-owned companies that are compensated for maintaining lower prices as part of their corporate responsibility, sources noted. This has led to mounting losses, forcing them to raise retail prices.
Since April 2022, retail prices for petrol and diesel have remained frozen, with state-run companies like Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) absorbing losses during periods of high crude prices while profiting when prices drop.
Last week, these three companies raised the price of premium petrol by Rs 2 per litre and increased the bulk diesel price for industrial users by approximately Rs 22 per litre.
However, the prices for regular petrol and diesel have not changed.
In Delhi, the price of premium 95-Octane petrol has risen from Rs 99.89 to Rs 101.89 per litre, while bulk diesel prices increased from Rs 87.67 to Rs 109.59.
Currently, a litre of regular petrol in Delhi is priced at Rs 94.77, and diesel costs Rs 87.67.
Regular petrol typically has an octane rating of 91-92, suitable for standard engines, while premium petrol, with an octane rating of 95-98, is designed for high-performance engines.
The government has reiterated that petrol and diesel are deregulated commodities, with pricing determined independently by oil marketing companies.
India relies on imports for 88% of its crude oil and about half of its natural gas, primarily sourced through the Strait of Hormuz. Following the US and Israeli strikes on Iranian facilities, Iran has warned against shipping in the strait, leading insurers to withdraw coverage and halting tanker movements.
Oil prices had previously surged to USD 119 per barrel in June 2022 after Russia's invasion of Ukraine. Although oil companies reported nominal profits that year, they achieved record profits of Rs 81,000 crore in FY24, compensating for previous margin losses.
In the December quarter of this year, the three major companies reported a combined profit of Rs 23,743 crore.