Days after being brought under the universal service obligation (USO), private fuel marketing companies like Nayara Energy and Jio-bp have asked their retailers to keep their pumps open and also increased the fuel prices to discourage sales.
Petrol pump operators have shared that Jio-bp and Nayara have increased fuel prices between Rs 2 and Rs 7 per litre. This follows the government mandate to bring all petrol pumps under the USO on Friday. This means that the pumps must maintain fuel supplies at reasonable prices during their specified working hours.
Fuel marketers have been witnessing unsustainable losses on each litre of petrol and diesel they are selling as state-run firms have not hiked retail prices for about two months now, even as the crude prices in international markets are on the rise.
According to the industry insider quoted by Economic Times, private players slash the supply to dealers so as to minimise their losses while keeping the prices higher.
Universal service obligation
“Now the authorised entities have been obligated to extend the USO to all the retail consumers at all the retail outlets. This has been done with an objective to ensure higher level of customer services in the market and to ensure that adherence to the USO forms a part of the market discipline,” the statement said.
The government did so after there were reports of long queues outside several state-owned companies’ pumps in some states. However, petrol pump operators are of the view that this will only increase their costs while sales will not be much owing to higher prices.
“This move by the government helps little. The company has increased diesel price by Rs 5 a litre and petrol price by Rs 7 a litre. Who will come to buy fuel from us at this price?” a Jio-bp retailer said on the condition of anonymity.
Another retailer of a private fuel marketer said, “We have been asked not to barricade our outlets and that company officials will be visiting our outlets to keep a check.”
Meanwhile, an industry body representing private and public oil refiners and retailers such as Jio-bp, Nayara Energy, Indian Oil, BPCL and HPCL has written to the government about unsustainable losses amid a price freeze announced by the government.
The Federation of Indian Petroleum Industry (FIPI) in its letter to the oil ministry said selling petrol at a loss of Rs 14-18 per litre and diesel Rs 20-25 per litre below soaring crude oil market prices is unsustainable. The industry body has sought government intervention to create a viable investment environment, reported PTI.Share This