A ₹3 per litre “happy hours discount” by private petrol retailers has seen outlets of State-run firms — Indian Oil Corp., Hindustan Petroleum Corp. and Bharat Petroleum Corp. — losing up to 50% market share at various locations, said dealers from across India urging their companies to immediately reduce prices.
The government deregulated petrol and diesel sales in 2010, allowing private competition in the domestic fuel retail business. The objective was to bring competition and benefit consumers in terms of price and quality. Dealers of State-run IOC, BPCL and HPCL, from Punjab, Bihar, Rajasthan, Madhya Pradesh, Haryana and the National Capital Region (NCR) said that this is now happening, and urged the companies to reduce fuel rates in response to their competition.
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“Posters of ₹3 per litre discount are there outside most of Jio-BP petrol pumps. In such a scenario, who will purchase petrol from nearby pumps of state-owned companies where prices are fixed centrally. We are losing between 25% to 50% of our daily sales depending on the proximity with private retail outlets,” said Monty Sehgal, a Jalandhar-based dealer of a state-owned oil marketing company (OMC), who is also the spokesperson of Petrol Pump Dealers Association of Punjab.
Rajasthan Petroleum Dealers Association president Rajendra Singh Bhati has shot off a letter to the petroleum ministry and chairmen of three state-owned OMCs on December 10, urging them to reduce fuel rates by ₹4-5 per litre and shield their market shares from private pumps of Jio-BP and Nayara. “Our pumps have registered 30-40% drop in the sales of petrol and diesel,” the letter written in Hindi said. “About 30% petrol pumps would inevitably closed if this situation continues for two months because dealers would not be able to bear the cost of maintain outlets for long,” Bhati added.
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IOC, BPCL, HPCL, Jio-BP, Nayara and ministry of petroleum did not respond to email queries on this matter.
Social media posts of private firms and local consumers confirmed the discounts. “Fuelling is going to be the happiest part of your road trips and commutes because… Jio-BP has extended its Happy Hours Saving offer — you can save Rs. 3/L of petrol between 10am–5pm; you also stand a chance to win grand bumper prizes and exciting weekly and daily prizes,” a December 12 post of Jio-BP on social media said.
“Both Jio-BP and Nayara pumps are giving discounts. There is nothing wrong in giving discounts especially when international oil prices have plunged. But, government must allow OMCs to cut oil prices immediately or else we will be forced to shut our pumps,” said Brajesh Sharma, who runs a pump of state-run OMC in a small town of Vidisha, Madhya Pradesh.
The government has always maintained that it has nothing to do with fuel prices, which have been deregulated, but it is an open secret that it decides on the benchmark prices through OMCs that it owns.
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State-run OMCs have not reduced petrol and diesel rates since March 15, 2024 despite benchmark Brent crude price falling by 14% to $73.39 a barrel on Wednesday. Even average international product prices fell sharply during the period – petrol from $102.13 a barrel in April to $79.09 in November (about 22.5%) and diesel from $99.94 in April to $86.79 in November (13.15%). As on July 1, 2024, there were 90,639 retail outlets in the country of which about 90% belong to the state-owned companies . Private firms are, however, aggressively expanding their networks nationwide as profit margin soars between ₹10-15 a litre depending on refining efficiency.
While many private firms advertise discounts on petrol upfront, they also give discounts on bulk purchase of diesel, dealers said. “With our meagre dealer’s margin, we are not in any position to offer discounts ,” said Dinesh Gupta from Gurdaspur, Punjab. According to the IOC website, its average dealer’s commission in New Delhi is ₹4.39 per litre on petrol and ₹3.02 on diesel, which, according to dealers, includes the cost of maintaining outlets.
