The company decided at a meeting on Wednesday night to halve diesel supply from Thursday, executives told ET on condition of anonymity.
“My regional manager informed me last night that RIL will only supply half of the diesel I sold in December 2021. They will use the December sales as a benchmark before the Omicron variant affects the business,” a Jio- BP said the dealer.
RIL did not respond to ET’s inquiries until press time.
RIL operates fuel retail stores under the Jio-BP brand as part of its joint venture with BP – Reliance BP Mobility Ltd (RBML). The retail joint venture was formed in 2020 after BP paid RIL 70 billion rupees for its 49% stake in the joint venture. RBML plans to invest Rs 3,000 crore to expand fuel retail outlets from about 1,400 currently to more than 5,500.
Another dealer said his diesel truck was returned empty from a gas station on Thursday. “Our area manager asked us not to supply diesel in bulk to any customers because our supply is dwindling. This is not the first time RIL has done this. We were in 2006, 2009, 2012 and 2014,” the dealer said , he owns several dealers in Jio-BP.
For better economic reasons, RIL is expected to increase diesel exports to European countries that have faced supply constraints after Russia’s invasion of Ukraine, industry executives said.
“Exports have always been RIL’s main customers. Its main customers are Europe and the eastern United States, and the market has expanded, creating great value for them. Even if domestic fuel prices rise, it’s not comparable to export profits,” said a senior oil Marketing company officials.
Oil marketing companies lose an average of up to Rs 25 per litre when selling petrol and diesel.
Indian fuel retailers have not revised oil prices since November 4 when crude was at $83 a barrel. Global benchmark Brent crude traded at $99.15 a barrel on Thursday morning, plunging from a March 7 high of $139, but up from $98 a day earlier, when China’s new Covid-19 outbreak eased concerns demand concerns.
RIL’s twin refineries in Gujarat can process 1.36 million barrels of crude oil per day. Its refineries have always been export-oriented. Europe has become an attractive market for Asian refiners since Russia invaded Ukraine.