Nayara Energy hikes petrol prices by ₹5/liter, diesel by ₹3

Nayara Energy hikes petrol prices by ₹5/liter, diesel by ₹3

Nayara Energy, India's largest private fuel retailer, has hiked its petrol and diesel prices.

The company raised the price of petrol by ₹5 per liter and diesel by ₹3 per liter.

The decision comes in light of the recent spike in global oil prices due to the ongoing conflict between US-Israel and Iran in West Asia.

Fuel marketing companies struggling

Fuel marketing companies in India have been struggling as retail petrol and diesel prices remain unchanged.

This comes despite a nearly 50% surge in international oil prices since February 28, when the US and Israel started military operations against Iran.

Nayara Energy, which runs nearly 7,000 of India's over 102,000 petrol pumps, has decided to pass on some of these rising input costs to consumers.

Jio-BP yet to raise prices

Jio-BP a joint venture between Reliance Industries and BP Plc that runs over 2,000 outlets, has not raised prices yet. This is despite suffering heavy losses on petrol and diesel sales.

State-owned fuel retailers, who control nearly 90% of the market share, have also kept their rates unchanged.

However, the effective rate hike varies from state to state due to local taxes like VAT.

Private fuel retailers absorb losses

Private fuel retailers in India do not get any government compensation for losses incurred due to price freezes. This is unlike state-owned firms that are compensated for holding back price hikes.

The mounting losses have left these companies with no option but to increase retail prices.

Retail petrol and diesel prices have been unchanged since April 2022, with state-run Indian Oil Corporation, Bharat Petroleum Corporation Ltd, and Hindustan Petroleum Corporation Ltd absorbing the losses when crude prices are high.

War in Iran affects oil prices

International oil prices had soared to $119 per barrel earlier this month due to the intensifying war in Iran, before stabilizing around $100 a barrel.

India imports 88% of its crude needs and about half of its natural gas requirement, mostly through the Strait of Hormuz.

After US and Israeli strikes on Iranian government, military and nuclear sites, Iran warned shipping away from the strait.