India’s largest private fuel retailer, Nayara Energy, has reportedly raised petrol and diesel prices, even as state-owned oil marketing companies continue to hold retail rates steady.
The move comes against the backdrop of a sharp surge in global crude oil prices following the recent escalation in the West Asia conflict.
Nayara on Thursday increased petrol prices by ₹5 per litre and diesel by ₹3 per litre, news agency PTI reported citing sources. The hike varies across states due to local taxes such as VAT, with petrol prices increasing by as much as ₹5.30 per litre in some regions.
Why has Nayara increased fuel prices
The decision comes as international oil prices surged significantly since February 28, when the United States and Israel launched military strikes on Iran, triggering retaliation and disrupting global energy markets.
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Private fuel retailers, unlike their state-owned counterparts, have been under mounting financial pressure. “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’,” the news agency's sources said, adding that rising losses have left them with little choice but to revise prices.
{{/usCountry}}Private fuel retailers, unlike their state-owned counterparts, have been under mounting financial pressure. “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’,” the news agency's sources said, adding that rising losses have left them with little choice but to revise prices.
{{/usCountry}}Nayara, which operates nearly 7,000 petrol pumps across the country – the maximum number for any private player – has opted to partially pass on the increased input costs to customers rather than absorb the entire burden.
Another report by Reuters said that the Russia-backed private refiner has raised prices in a move aimed at offsetting mounting revenue losses from retail fuel sales, petrol pump dealers said.
State-owned companies hold rates
Despite the global price surge, state-run oil companies – Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd – continue to keep retail petrol and diesel prices unchanged. These firms control about 90 per cent of India’s fuel retail market.
Retail fuel prices have largely remained frozen since April 2022, with these companies absorbing losses during periods of high crude prices and recovering margins when global rates soften.
However, the some companies recently raised prices of premium petrol by ₹2 per litre and increased bulk diesel rates for industrial users by about ₹22 per litre. In Delhi, premium petrol now costs ₹101.89 per litre, up from ₹99.89, while bulk diesel prices have risen sharply.
Normal petrol and diesel prices, however, remain unchanged at ₹94.77 and ₹87.67 per litre, respectively, in the national capital.
Indian refiners are incurring losses estimated at over ₹50 per litre on diesel and around ₹20 per litre on petrol due to retailing fuels below market rates, Reuters reported citing an industry source.
Global oil volatility behind pressure
The recent price stress stems from geopolitical tensions in the Middle East. Crude oil prices climbed to around $119 per barrel earlier this month before easing to about $100.
India, which imports nearly 88 per cent of its crude oil and about half of its natural gas, is particularly vulnerable to such disruptions. A significant portion of these imports passes through the Strait of Hormuz, a key global energy chokepoint.
Jio-bp, a joint venture between Reliance Industries and BP Plc, has so far not increased prices despite reportedly incurring losses, indicating varying strategies among private players, the PTI report added.
Following attacks on Iranian facilities, Tehran warned shipping away from the Strait of Hormuz, effectively disrupting vessel movement and tightening supply.