Until last year, it received supplies from state refiners who used to be compensated for selling fuel at below-market rates.
The government freed diesel pricing last October, providing a level playing field to private companies like Reliance and Essar Oil.
The Reliance source, who was not authorised to speak on the record, said the company has been selling a "small quantity" of diesel to the railways. It was not immediately clear how much it sold in 2005/06.
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