Essar Oil to open 500 retail outlets

Company eyes turnover of Rs 1,700 crore this FY

After commencing petroleum retailing less than a year ago in September 2003, Essar Oil Ltd has chalked out a major expansion plan and aims to set up over 500 retail outlets by the end of the current fiscal year.

The company at present has 37 outlets located in Maharashtra, Gujarat, Punjab and Rajasthan.

In the next one month alone, Essar Oil will open retail outlets in the north and south India. Retail outlets will be started at Andhra Pradesh, Karnataka, Kerala, Uttar Pradesh and Haryana in the next month.

Following this, retail outlets are planned to be opened in all other states by the year end.

"We started off from the coastal areas and now are embarking on an expansion into the interior areas. Essar Oil will have over 500 retail outlets covering almost all states of the country by the year end. We are also targeting a turnover of Rs 1,700 crore in this financial year," said A N Sinha, managing director of Essar Oil.

Essar Oil was the first private sector company to venture into petroleum retailing.

Sinha said as a strategy, the company went slow and steady, but now it will undertake a strong expansion drive.

"We have tied up with one of the best refineries of the country as well as with some of the most reputed oil companies in the world. Petrol and diesel sold from Essar oil outlets will be priced competitively and will be cheaper than that sold by PSU oil companies," Sinha said.

As part of its retailing plan, Essar Oil proposes to set up about 2,000 retail outlets over next three years.

In line with the approval of the central government for retailing petroleum products, Essar Oil will set up 12 per cent of the retail outlets in backward and low-service areas.

Essar Oil proposes to set up at least 300 retail outlets in Gujarat by 2005.

It has already commissioned 13 retail outlets and has appointed about 122 franchisees and the outlets are in various stages of commissioning.

Essar Oil is focusing on the quality of the products sold, the company said. Diesel sold at its outlets conform to international specifications. This helps truckers get better mileage and reduces maintenance cost, keeping the engine clean.

Essar Oil has tied up with Castrol India for supply of lubricants in western India. It is also tying up with other reputed lubricant manufacturers in other parts of the country.

Sinha said special attention is being given to services available at Essar petrol pumps.

"We are preferring franchisees with no background in petroleum retailing and hence will have an altogether fresh approach. Moreover, a survey will be conducted at each proposed retail outlet, seeking to know what customers want, before the retail outlet is set up. Also, attendants will receive a special training before they start working at retail outlets," the official said.

Essar Oil promised to provide consumers with high flash point diesel.

"Diesel offered by PSU oil majors has a flash point of between 34 and 36. Diesel offered by Essar Oil has a flash point of over 60. It is the safest fuel," Sinha said.

He said diesel offered by Essar is on par with international standards.