Reliance-BP and Nayara Energy have significantly increased their market share in diesel sales in India, thanks to lower prices and attractive discounts. According to recent data, their combined share has nearly tripled to 9.4% in June compared to the same period last year.
Reliance-BP’s share in total diesel sales has risen from 1.2% to 4% in June, while Nayara Energy’s share has expanded from 2% to 5.4%. On the other hand, Shell’s share remained stagnant at 0.1%.
This increased market share for private players has come at the expense of state-run players, whose share has dropped from 96.7% to 90.5%. BPCL and HPCL, however, have managed to gain marginally in market share. Indian Oil Corp, on the other hand, has been the only loser in this game, with its share declining from 49.1% to 41.4%.
The growth in market share for private players signals a return to normalcy in the industry. Last year, private players were discouraging domestic sales as they did not want to compete with state-run players who were selling at significantly lower prices due to the skyrocketing international fuel prices. However, with international fuel prices falling and domestic pump prices remaining unchanged, private players can now afford to offer discounts and attract more customers.
Fuel retailers are currently making supernormal profits, earning around ₹8-9 on each liter of petrol and diesel sold in the April-June quarter, according to estimates from ICICI Securities. This allows private players to offer discounts while state-run players continue to focus on overall gains without reducing prices.
It is worth noting that the current market share for private players in diesel sales is still less than the 11.3% they had in June 2021. However, their recent gains indicate a shift in the dynamics of the industry.
Overall, the increase in market share for Reliance-BP and Nayara Energy is a positive development for the private players. By offering competitive prices and attractive discounts, they have managed to regain domestic customers they had lost last year, while also focusing on the high-margin export market.
With the reshuffling of market share, the diesel sales landscape in India is getting back to normal. The industry is expected to continue evolving, with both private players and state-run players adapting their strategies to remain competitive and profitable.
