Insisting on a fair deal, Reliance Industries Ltd (RIL) has told the government it is “temporarily” stopping petrol and diesel supplies to all its retail outlets and would be back in business once it gets a level playing field. In a letter dated April 2, RIL clarified that it has taken the “step to temporarily suspend supply to retail outlets progressively from March 15”.“We hope to return to normal sales as soon as the situation improves in terms of correction in crude oil prices, creation of level playing field or through any other policy intervention, so that retail operations become economically viable,” it assured the Petroleum Ministry.Despite selling at a higher price, Reliance was losing Rs 3.4 a litre on petrol and Rs 5.8 a litre on diesel. In contrast, state firms lost Rs 10.93 on a litre of petrol and Rs 14.66 on diesel, but were compensated through government bonds or cross-subsidy from state-run upstream oil companies. “We have been continuing retail operations so far incurring loss. Sales have been progressively reducing due to price differential and have reached a very minimal level. The cost and effort of continuing in this situation is prohibitively high for dealers as well as for us and hence has become economically unviable,” wrote RIL.RIL’s request has been forthcoming for the last 22 months, but the government feels that since RIL broke away during its initial marketing period without caring about state retailers, there was no reason for it to now get an equal footing.
