Why Bulk Diesel Costs Rs 129: The Impact on Indian Industries

In a departure from standard wholesale logic where buying more usually costs less, bulk diesel in India has seen its prices skyrocket compared to retail fuel. Bulk diesel is the fuel used by massive industrial consumers including the Indian Railways, state-run transport corporations, cement plants, and large-scale manufacturing units. These entities do not go to a petrol pump; instead, they have their own storage tanks and receive fuel via tankers directly from companies like IOCL, BPCL, and HPCL. The recent surge to approximately Rs 129 per liter is a direct consequence of the dual pricing policy adopted by the government and oil companies. By keeping retail prices lower for common citizens and charging market rates to bulk consumers, OMCs attempt to recover some of their under-recoveries. However, this has led to significant financial strain on state transport undertakings, many of which have started diverted their buses to local retail pumps to save money, a practice that OMCs often discourage as it creates logistical challenges at the retail level.