Increase of 4.57% in the PSU OMCs' market share in petrol, diesel retail: Joint Petroleum Secretary

New Delhi: India's public sector oil marketing companies (OMCs) have widened their already dominant grip on the country's fuel retail business since the onset of the West Asia crisis, with a 6.2 percent rise in sales translating into a 4.57 percent gain in their market share, a senior oil ministry official said on Thursday.

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PSU OMCs market share up: Joint Secretary

"I would also like to inform that PSU oil marketing companies have registered a healthy growth of 6.2 percent in sales which has led to an increase of 4.57 percent in the PSU market share," Sujata Sharma, Joint Secretary, Ministry of Petroleum and Natural Gas, said at an inter-ministerial press briefing.

The gains, recorded since the West Asia crisis began, point to an accelerating consolidation of an already concentrated market in favour of the three state-run retailers — Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL).

PSUs already control the bulk of the market

The three companies enter this phase from a position of overwhelming strength. Public sector oil companies own more than 90 percent of India's petrol pumps, with Indian Oil the single largest retailer, followed by BPCL and HPCL. IOC operates 41,664 outlets, BPCL runs 24,605 and HPCL 24,418 — a combined network that recently took India's total petrol pump count past the one-lakh mark.

By contrast, private retailers occupy a sliver of the market. Nayara Energy, backed by Russia's Rosneft, is the largest private player with 6,921 outlets, the Reliance-BP joint venture operates 2,114 pumps, and Shell's footprint is smaller still.

Why customers are switching

The shift in volumes traces back to the pricing dynamics unleashed by the West Asia crisis. As global crude prices spiked, private retailers such as Nayara and Shell raised pump prices to stem mounting losses, while IOC, BPCL and HPCL initially held retail rates steady and absorbed the hit — pushing consumers towards PSU stations and costing private players sales and market share.

Earlier, all three PSU retailers themselves flagged this migration as a key driver of the demand surge that left some of their outlets running dry, even as they denied any rationing.

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The losses behind the price freeze

The market-share gains have come at a steep cost to PSU balance sheets. The companies have been selling petrol, diesel and LPG below cost to shield consumers, with Petroleum Minister Hardeep Singh Puri recently pegging the daily under-recovery at Rs 500-550 crore. A mid-May report had put the combined daily loss of the OMCs at around Rs 1,000 crore as they kept retail prices steady despite the global energy shock.

A split verdict among private players

Notably, not every private retailer has lost ground. Reliance-BP, which largely kept its petrol and diesel prices close to PSU levels rather than raising them, saw its petrol sales rise 23 percent and diesel sales 4.5 percent, lifting its petrol market share from about 3.5 percent to roughly 4 percent.

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