• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

A file picture of petrol vending guns at a pump.

Richa Mishra

New Delhi, March 11 Despite a narrowing down of the price differential between regular and branded auto fuels, the sales of the branded or premium version of both diesel and petrol have taken a hit because of the downturn.

While the growth in demand for branded or premium diesel has come down to 10 per cent from 17-18 per cent earlier, for branded petrol, it has dropped from 22 per cent to 19 per cent. Demand for diesel, the highest consumed product, dipped in the second half of the current fiscal, both in the branded and unbranded category.

Last fiscal, the industry sold 5.8 million tonne of branded diesel and 3.3 mt of branded petrol. This fiscal, up to January, premium diesel sales stood at 4.3 mt and branded petrol at 2.7 mt. “A marginal improvement is expected in February-March. However, it will still fall short of last year’s consumption figures,” an industry source told Business Line.

“The first casualty of the economic slowdown is the spending on premium products. The shift from regular to branded products started seeing a decline since September. Also, when there is a drop in demand for regular products, premium products are bound to be affected,” sources said

In fact, due to the dip in industrial activity, diesel as a product (both branded and unbranded) registered a growth of only 2.1 per cent in January from a year earlier.

There was a time when branded diesel was priced Rs 2 higher than regular diesel and branded petrol used to cost Rs 4 more than the regular. Today, however, the retail price of branded diesel on an average is Rs 1.75 more. while the branded petrol price is Rs 2.50 costlier .

There is also the excise duty component on the branded product which is driving the volumes down. The excise duty on petrol is Rs.0.87 per litre and diesel Rs 1.07 a litre, sources added. The branded diesel from Indian Oil Corporation is priced at Rs 32.61 a litre, while the regular diesel costs Rs 30.86 a litre.

The drop in sales has led the industry to work out strategies to make the branded product more attractive for consumers. “The industry is making an effort to change customer perception and retrieve the lost market. Branded fuel sales are picking up, but at a slower pace,” sources said.

More Stories on : Economy | Petroleum | Trends

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line