Media reports suggest that private fuel retailers like Essar Oil, Reliance Industries (RIL) would attempt to grab the share of the bulk diesel customer market after the government de-regulated pricing in the segment.
The government allowed oil marketing companies (OMCs) to charge market price for bulk customers of diesel, that include railways, industrial users and State Transport Corporations.
So far, public sector OMCs had monopoly in this market because private sector did not find it viable to sell diesel at subsidised rate. State-run OMCs were eligible to get compensation for selling diesel at subsidised rate.
But now, with the deregulation of diesel pricing for bulk customers, private firms are trying to have their share in the market.
But capturing the market may not be easy for the private players. Industrial users and State Transport Corporations have become smarter and, instead of buying from depots at market rates, are tying up with retail outlets for supplies, reports suggest.
The Railways, at present, have contracted supplies with public sector retailers. So, only when this contract expires can competition from the private sector be expected, he added.
Further, industry watchers argue that private retailers would also require infrastructure, such as a fleet of tankers and depot terminals to cater to customers located far away from their refineries.
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