InvestorQ : Why has the government raised the prices of diesel only for bulk users?
Mahima Roy made post

Why has the government raised the prices of diesel only for bulk users?

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2 months ago
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This is an interesting strategy adopted by the government, this time around. It has increased the price of diesel sold to bulk users by Rs.25 per litre. The retail prices of petrol and diesel remain the same. The idea here is to compensate for the 40% spike in crude prices that has been witnessed ever since the Russia Ukraine war began. The oil prices are up over 80% since the start of the month of December 2021. However, the impact may be quite harsh.

On the one hand, this move will have a negative impact on private retailers like Nayara Energy, Jio-BP and Shell. Many of their pumps may be forced shut if their cost increases but the retail prices are kept at the same level. Diesel is sold at retail pumps for Rs.94.14/litre but it will be sold to bulk users at Rs.122.05/litre. That means, most of the bulk users will queue up at the retail petrol stations resulting in huge losses for oil marketing companies.

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