Indianoil gains bulk diesel market share in april may beats reliance industries and nayara

Indianoil gains bulk diesel market share in april may beats reliance industries and nayara

IndianOil has jolted the bulk diesel market, increasing its share by 10 percentage points in April-May and wresting ground from Reliance Industries and Rosneft-backed Nayara Energy-a striking reversal driven by new chairman A S Sahney's break from predecessor SM Vaidya's margin-first playbook in favour of market dominace.

IndianOil's share surged to 53.5% in April-May this year, up from 43.6% in the same period last year, forcing private sector rivals RIL and Nayara to surrender a combined 7 percentage points from their last year's share of 25.7%. RIL's share dropped to 9.9% from 13.8%, while Nayara's fell to 8.7% from 11.9%. Among state-run firms, Hindustan Petroleum's share contracted to 12.9% from 14.2% and Bharat Petroleum's declined to 12.5% from 14.8%.

Indian Oil is using aggressive price discounts to boost volumes and push competitors aside, multiple industry executives said. Lower crude prices-currently around $65 per barrel, down from nearly $80 in January-have fattened oil companies' margins, enabling them to offer steeply discounted diesel to large customers. While all suppliers are offering diesel to bulk buyers below pump prices, some are going deeper to gain market share, they said.

IndianOil has traditionally dominated diesel sales, but its market share slid to 43.6% in April-May 2024, down from 52% in the same period of 2023 and 60% in 2022. "As a marketing organisation, you can't afford to lose market share so rapidly. One day, you might suddenly find too much volume sitting in your refinery, hurting profits and limiting your ability to invest," said an industry executive defending the company's aggressive push.

Roughly 12% of the diesel sold in India goes to bulk buyers, with the rest sold through petrol pumps. Bulk consumers such as the railways, defence and state transport corporations usually pay contracted prices discovered through tenders, while miners, manufacturers and smaller users typically buy on a monthly basis-shifting to whichever supplier offers the steepest discount.

IndianOil's recent gains are concentrated among miners, manufacturers and some transporters, with strong traction in the mining belts of Jharkhand, West Bengal and Chhattisgarh, as well as in Rajasthan, Haryana and other states.