Nayara Energy increases petrol price by Rs 5 and diesel by Rs 3

Nayara Energy has raised its retail fuel prices across India, adding Rs 5 per litre to petrol and Rs 3 per litre to diesel.

The new rates took effect at the company's 7,108 petrol pumps across the country. The decision is a direct response to rising global crude oil prices and refined product costs, which have squeezed the profit margins of private fuel sellers.

Why Nayara raised prices

This is not the first time Nayara has adjusted its prices to cope with volatile global markets. The private refiner introduced an identical price hike in late March following energy supply disruptions linked to conflicts in the Middle East. It later rolled back those increases in July as international oil prices cooled.

The latest move is a fresh attempt to close the widening gap between what Nayara pays for crude and the prices it charges at the pump.

While Nayara has moved to protect its margins, state-owned fuel retailers have not followed suit. Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum—which together control more than 90% of India's 104,137 fuel stations—have kept their retail prices steady despite global market fluctuations.

Squeezed margins and supply pressures

The price freeze by state-run firms has put private players in a difficult position. Rating agency Icra estimated that oil marketing companies were facing negative marketing margins of about Rs 8 per litre on petrol and Rs 9 per litre on diesel in September. The agency noted that these companies were losing roughly Rs 530 crore a day across petrol, diesel, and cooking gas.

According to Icra, domestic refiners generally need international crude prices to stay between $85 and $90 a barrel to break even across their refining and marketing arms. Without retail price adjustments, higher crude costs quickly translate into heavy marketing losses.

These financial pressures have already caused friction. Earlier this year, both Nayara and Jio-bp—a retail joint venture between Reliance Industries and bp—limited fuel sales at some of their stations to contain losses.

The issue was compounded by industrial consumers. Because bulk fuel prices rose faster than retail prices, industrial buyers began purchasing cheaper diesel directly from retail pumps, straining supplies. In response, the government issued a directive on 1 October warning private retailers not to restrict fuel sales.

What happens next

So far, Jio-bp, which operates 2,304 fuel stations in India, has kept its prices unchanged.

Nayara, which operates a 20-million-tonne-a-year refinery at Vadinar in Gujarat, did not comment on the price increases.

The price hike is likely to drive price-conscious motorists toward state-run fuel stations. However, if state-owned companies eventually follow Nayara's lead and raise retail prices, the broader economy could face upward pressure on transport costs and inflation.