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Diesel price hikes by 25 rupees for bulk customers: prices on rise ?

The diesel price has been hiked by Rs 25 at once for the bulk customers due to the rise of fuel prices in the international market by almost 40 percent, according to PTI. But the retail price for diesel remains unchanged. As a result, petrol pump sales have increased by one-fifth as the bulk buyers like bus fleet operators and malls are now preferring to buy fuel from petrol pumps at lower prices rather than the usual practice of buying fuel directly from oil companies. Retailers are making extra profit out of it.

Despite an increase in international crude oil prices, the retail fuel prices remained unchanged widening the loss of Oil Marketing Companies. The gross marketing margin which is OMC’s income seling per litre of diesel and petrol had been negative by Rs 12.5 per litre and Rs 9.9 per litre for four consecutive weeks. To make up for the losses, they hiked the price for bulk customers by Rs 25. But the strategy failed miserably as the bulk customers continue to buy fuel at the same price as before from retailers.

An impending rise of petrol has also led customers, both bulk and retail, to fill up their tanks before there is further hike of prices. This has led to a surge in sales this month and the entire supply chain is under pressure, according to RIL. They said “There is a massive surge of demand at fuel stations (retail outlets) due to increased delta of around Rs 25 per litre between retail and industrial price of diesel, leading to heavy diversion of bulk HSD (direct customers) to retail outlets. There is also a very heavy lifting of fuel by dealers and both B2B and B2C customers, who have advanced their purchases, to top up their tanks and capacities in anticipation of price increase which is overdue.”

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