Branded fuel sales skid 30%

Brand-conscious automobile owners are becoming price-sensitive, too. The sale of branded petrol and diesel, priced at a premium to regular fuel, has dipped by 30-40 per cent, in the wake of branded fuel prices having risen by 16 per cent since April.

Branded petrol such as Indian Oil’s Xtrapremium and Bharat Petroleum’s Speed sells at Rs 2.50 per litre more than the regular petrol. “There has been a decline in sale of branded fuel due to a variety of factors, including price. In diesel, the share of branded fuel in total sales has come down from 18 per cent to three per cent over a period of time,” said G C Daga, director (marketing), Indian Oil.

The price gap between branded diesel and non-branded diesel is in excess of Rs 2 a litre. Much of this is also due to a Rs 1.15 a litre higher basic Cenvat duty on both branded petrol and diesel vis-a-vis the non-branded fuel. “The government should re-look at the duty structure on branded fuels to promote its consumption,” said a Bharat Petroleum executive.

The branded fuel is custom-designed to deliver higher mileage, more power, better pick-up, faster acceleration, enhanced engine cleanliness and lower emissions. Indian Oil, BPCL and Hindustan Petroleum are selling branded petrol well above Rs 58 a litre. “In petrol, the proportion of branded sale to the total used to be around 20 per cent last year, which has now come down to 11-12 per cent. In diesel, too, the proportion has come down from over 20 per cent to a little over six per cent,” said Nishit Goel, vice-president of the Delhi Petroleum Dealers Association.

Prices of both branded and non-branded petrol and diesel have seen a series of increase in the current financial year due to the spurt in crude oil prices. Petrol has been increased seven times, by a cumulative Rs 7.94 a litre to Rs 55.87 in Delhi, since April. The Indian basket of crude oil which had averaged between $75-80 per barrel is now above $91. The current year’s average price is $79.09 per barrel, up 13 per cent from the 2008-09 average of $69.76.