The defunct Reliance fuel retail dealerships in Uttar Pradesh are cheering the recent de-regulation of fuel prices by the Centre.
The harried dealers are confident that the outlets would soon be opened and they would be able to get returns on their investment locked for over two years.
Mukesh Ambani-promoted Reliance Industries Limited (RIL) had closed down these outlets in 2008 due to mounting losses accrued by selling fuel above the subsidised fuel prices of public sector oil marketing companies.
The petrol and diesel sold at Reliance outlets were costlier by over Rs 5 vis-à-vis public sector retailers such as Indian Oil Corporation and Bharat Petroleum.
At the time of closure, there were about 115 Reliance fuel outlets in Uttar Pradesh, of which almost 35 were company-owned and rest dealerships. However, some dealers in the state had disposed off their property to Reliance after the closure due to uncertainty of revival and to unlock their investment.
“Following the de-regulation of fuel prices, we have contacted Reliance officials to know the future course of action. They are also awaiting a final decision in this regard,” a Reliance dealer based in eastern Uttar Pradesh told Business Standard.
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Another dealer near Lucknow said it had been confirmed that the outlets would be opened, but the decision on timeline was yet to be taken by the company.
Although, the Centre on June 25 de-regulated petrol prices, diesel is also likely to de-regulated in due course, as affirmed by prime minister Manmohan Singh, to cut fiscal deficit.
“The dealers are happy they can start their business and we are in constant touch with them. The company is looking at the issue, as the government is yet to free diesel prices. Besides, several things need to be taken care of before these outlets are restarted, including infrastructure and logistics,” a Reliance official, who declined to be identified, said.
To a question, he maintained that the outlets would be opened before 3 months and said the company would look at increasing its network.
Pan-India, Reliance owns around 1,400 outlets, of which only 600 odd are operational at present.
“The oil marketing norms of the private sector are quite different from the public sector companies,” Uttar Pradesh Petrol Dealers’ Association president B N Shukla said.
Essar operates some fuel outlets in the state.
Following the deregulation, the petrol and diesel prices were increased by Rs 3.69 and Rs 1.95 per litre respectively pushing them to the level of around Rs 54.85 and Rs 39.41.