RIL's retail fuel market share may slump

Reliance Industries, whose share of the auto fuel market had climbed after it cut prices of petrol and diesel in October this year, could see it slump again with Wednesday's oil price cut by the government.

The company indicated it may not follow the cut in prices of auto fuel by public sector oil marketing companies unless there is a fall in the international prices of crude oil. A company executive said, "Our prices will continue to be in line with international prices."

Reliance's October price cut had brought the price of its auto fuels at par with those of the public sector oil marketing companies.

RIL recorded sales of 5,000 kl a day through October and November, pushing its market share to 4.33 per cent. The company's share had fallen from 13 per cent at 15,000 kl a day till April this year to 800 kl a day and 0.7 per cent of the market in the second quarter.

"Price differential with public sector companies saw our market share plunge after April. The petrol price cut could again erode some of the market share that we have managed to regain," a company source said.

RIL had cut prices of both petrol and diesel on October 1 this year by Re 1 per litre. Another Re 1 was shaved off the retail prices on October 16. Before October, the company was selling fuel at almost Rs 2.50 a litre higher than the PSUs. After the price cut, the price differential with public sector oil companies came down to 50 paise.

However, with the government deciding to cut fuel prices earlier this week, the difference will again increase to Rs 2.50 a litre for petrol and Rs 1.50 a litre for diesel.

Government data shows that in October this year, private sector oil marketers' share of petrol sales increased to 4.47 per cent from 3.19 per cent in September.

Their share of diesel sales rose to 2.44 per cent from 1.32 per cent. Their composite share of the auto fuel sales increased to 2.81 per cent in October from 1.68 per cent in September.