Reliance Industries has slashed the price of fuel to snatch back market share lost to state pumps in the days after demonetisation, when the latter accepted old notes for some time and currently offer a discount on digital purchases.
Filling stations run by Reliance Industries have begun offering diesel to customers at 1 discount to the price offered by pumps run by state companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum.
“That (Reliance’s price discount) could have happened because of the incentive scheme provided by the PSUs,” Indian Oil Chairman B Ashok said. “Market-to-market, we would respond, if it is going to induce a fresh set of competitive pressure. Each market has its own tendencies, so we will respond accordingly.”
State-run pumps are already feeling the heat in a little more than a week since Reliance’s diesel price discount began. “Reliance pumps have significantly gained share in the specific markets they operate in,” said Nitin Goyal, treasurer at All India Petroleum Dealers Association (AIPDA), a body of state pump dealers. At a meeting slated for January 7 in Bengaluru, the association will discuss, among other things, ways to neutralise Reliance’s move, Goyal said. Read More…