As oil marketing companies (OMCs) stare at huge under-recoveries, India is facing fuel shortage across the country with states like Rajasthan, Madhya Pradesh, Karnataka Uttarakhand, Gujarat and Haryana being the worst hit. The under-recoveries suffered by OMCs are around Rs 20-25 a litre for diesel and Rs 14-18 a litre for petrol, said sources. Government and state-run companies denied reports of any crisis or supply-side issues on the availability of fuel.
As fuel prices surged in September, the government's decision to ask companies to cut price by Rs1 each on a litre of petrol and diesel came as a dampner for private players.
Experts say local demand, government policies in retail and refining sector are attracting foreign players.
A looming global shortage of diesel in Europe presents India with more than one opportunity to profit from strong margins. A shortage of the fuel, a key contributor to inflation, has been exacerbated by the conflict in Ukraine, and western sanctions on Russian fuel supplies. The slowdown in natural gas supply means the West needs diesel to heat their homes this winter.
Global energy supermajor BP plc on Thursday said it is about to open its first 'Jio-bp' branded petrol pump in partnership with Reliance Industries near Mumbai.
The windfall tax on oil produced within India and fuel exported overseas will make up for more than three-fourths of the revenue that the government lost when it cut excise duty on petrol and diesel to cool soaring inflation, industry sources said. India on July 1 joined a select league of nations globally that have taxed windfall gains accruing to oil companies from soaring energy prices. The government slapped a Rs 6 per litre tax on the export of petrol and jet fuel (ATF) and Rs 13 a litre on the export of diesel effective July 1. Additionally, a Rs 23,250 per tonne tax was levied on crude oil produced domestically.
India may see a structural shift in supplies of crude oil with Russia emerging as a key source of fuels, a development that reduces New Delhi's dependence on West Asian oil, gives Indian refiners better bargaining power with price-setter Saudi Arabia, and improves overall energy security. The unexpected surge in supplies of Russian crude in the last few months, unthinkable until the war in Ukraine, may also deliver other unforeseen gains such as boosting exports of refined fuels to Europe, which historically has counted on Russian shipments. India has jumped on to the bandwagon of opportunistic buying of Russian crude but if calibrated carefully, Urals crude can be a long-term asset for India refiners.
Stocks of Indian companies with exposure to Europe fell on Tuesday amid concerns about the impact on their sales in case the Russia-Ukraine crisis worsens and the US and its allies impose economic sanctions on Russia. While top conglomerates, including Reliance Industries, the Tata group, and Aditya Birla Group, said they did not have any significant exposure to Russia, executives of some of the oil and gas, pharmaceutical, and tea companies said they were monitoring the situation closely as they earned substantial income from the region. Russian President Vladimir Putin on Monday ordered troops into two breakaway regions of eastern Ukraine after announcing that Russia would recognise their independence.
State governments in Punjab, Gujarat, Maharashtra and Jammu & Kashmir are on high alert and have come up with contingency plans to ensure the security of residents in case of a war.
Govt's move will facilitate entry of global giants such as Total SA of France, Saudi Arabia's Aramco, BP Plc of the UK, and Trafigura's downstream arm Puma Energy.
At present, India has 56,999 fuel outlets. Of those, only 6,276 are owned by private companies
The only fuel that showed growth was LPG as the government dole of free cooking gas cylinders to poor households fired up consumption by 21 per cent during April 1 to 15.
The dealers are protesting against the use of petrol pumps for government campaigns and seeking of personal data of over a million people working there
The Vedanta group on Wednesday confirmed putting in a preliminary expression of interest (EoI) for buying the government's stake in Bharat Petroleum Corp Ltd (BPCL).
While the Saudi drone strike has put the focus back on anti-drone measures, caution also stems from the fact that India has a number of large oil refining assets close to India-Pakistan border.
According to sources, Russian energy giant Rosneft or its affiliates, Saudi Aramco and Reliance Industries are in race for BPCL's three refineries - Mumbai, Kochi in Kerala and Bina in Madhya Pradesh - 16,309 petrol pumps, 6,113 LPG distributor agencies and more than a fifth of 256 aviation fuel stations in the country.
If IOC is not allowed to run its own affairs, then we can see it close down in the next 10 to 15 years, warns Sudhir Bisht.
One of the major advantages of buying Iran crude is the additional credit period of 90 days that the country gives to India, compared to 30 days by other countries.
US sanctions against Iran kick in from November 4, which will block payment routes. Sources said India and Iran are discussing reverting to rupee trade after November 4.
Reliance Industries will sell 20 per cent stake in its oil and chemicals business to Saudi oil giant Aramco for about $ 15 billion and nearly half of its fuel retail business to BP of UK for Rs 7,000 crore. Aramco, the world's biggest crude exporter, will also supply Reliance's twin-refineries at Jamnagar in Gujarat with 7,00,000 barrels of oil a day on a long-term basis, Ambani said.
"We will be guided by our national interest," he said.
'There exists a 'brotherhood' of sorts for a very long time and corrupt dealers and corrupt OMC officials are in it together,' Ashwani Attrish, founder, Empowering Petroleum Dealers Foundation, tells Sudhir Bisht, a veteran of the petroleum industry.
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances