0		dollars, per, barrel,, Reliance, Petrol, bunks, might, open, soon

Reliance Industries closed their 400 odd petrol pumps in April when the oil rate was above $130 per barrel. Now, the oil rate has eased up and is hovering around $50.

This is a good time to open its petrol outlets as the prices seems to be competitive. There is news that Reliance might open the outlets soon. Essar Oil is already opening up the outlets.

The reason Reliance and Essar has to close their outlets was - they were incurring heavy losses. So does the other outlets like HPCL, BP, Indian Oil. But, they are subsidizing oil at the government’s order. If they are making losses (which they are) and go bankrupt, Indian government will back them up.

Private players (Reliance, Essar and Shell) do not have this luxury. Another private player Shell shut few outlets down and sold premium petrol at 72 rupees per liter. There were few takers for that expensive fuel. People shifted their allegiance to the cheaper versions.

This would be a good case study for removing the subsidies and implementing market pricing in India. The private players are starting their operation only when the oil is at $50 per barrel. Lets just say, that is the profitable price for the oil marketing companies to make profit.

If the oil goes to $40 per barrel will the private players reduce the per liter price in India?

*Image via cksquare-flickr