The total market share of private players such as Reliance, BP, Shell, and Rosneft-backed Nayara Energy has decreased by 50—80% year over year.
According to statistics gathered from oil firms, the three private operators collectively had a 2.3% share of the domestic retail market for diesel in July, down from 2.9% in June and 10.6% in July 2021. Their market share for gasoline decreased to 5% in July from 9.8% in July of the previous year and 5.6% in June of this year.
During a period when gasoline prices were artificially steady, this led to higher sales and unwelcome market share gains for state refiners. State-run refiners combined for a share of 95 % in gasoline and 97.7 % in diesel in July. Their market share in gasoline and diesel was 90.2% and 89.4%, respectively, a year ago.
While adding to the losses state enterprises were already suffering as a result of the retail price freeze, the large and abrupt shift in demand from the pumps of private players to public companies created significant hardship for customers in several locations over the summer. The state-run retailers Hindustan Petroleum, Bharat Petroleum, and Indian Oil recorded a total loss of Rs18,500 crore for the April—June period.
Industrial customers migrating to gas stations for cheaper fuel was another factor in the extraordinary increase in retail sales of diesel. Oil corporations frequently promoted the transition out of concern about losing industrial clients to competing retailers, according to industry executives.
Direct sales of diesel to industrial clients plummeted 54% in July from the same month last year. The drop in June was 44%. Direct sales of fuel to large purchasers accounted for 13% of all diesel consumption in the nation in July 2021. The percentage decreased to 5.5% in July of this year.
Oil firms provide fuel directly to industrial clients at a discount from retail prices, but in recent months bulk supplies have been far more expensive than fuels accessible at pumps. In July, private players’ sales to large purchasers decreased by almost 60% year over year, and their market share decreased to 10.7% from 11.9% in July 2021.
Beginning in July, the government levied a windfall tax of Rs6 per liter and Rs13 per liter on gasoline and diesel exports, respectively. Additionally, it instructed refiners to sell at least 30% of the diesel and 50% of the gasoline they export on the domestic market. On July 20, the tax on gasoline exports was eliminated and the price of fuel was lowered to Rs11. This month, the tax on diesel has decreased even more to Rs5 per liter.
80—85% of the nation’s gasoline exports are produced by private refiners. Additionally, they provide international pricing to state-run fuel stores. For the private refiners, anything they sell to state-owned businesses also counts as domestic sales.
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