 "Reliance to tread cautiously on ramp-up of fuel retail outlets")
Reliance Industries plans to gradually reopen all its 1,400 fuel retail outlets by next March. It has nearly 400 filling stations working now.
“We made huge investments in fuel retail. But we had to shut our outlets in 2008. We will go cautiously this time. We are in no hurry to ramp up,” said a Reliance Industries executive. According to industry players, Reliance Industries has less than 0.5 per cent share of the fuel retailing market.
Other private oil companies like Essar Oil, Shell India, and Mangalore Refineries and Petrochemicals (MRPL) are scaling up their fuel retailing operations, too. Essar Oil has 1,500 filling stations and another 1,400 are being readied. Shell India has around 80 outlets and MRPL will begin commissioning its stations soon.
The government deregulated diesel prices last October, providing a level field for private and state-owned fuel retailers. Private players have moved to take advantage of the deregulation. State-owned oil refiners Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation control 95 per cent of the fuel retailing market.
Private refiners had entered fuel retailing after it was opened up in 2003. By 2006 most of them had started winding down operations as oil prices rose and it became difficult for them to compete with government-dictated subsidised prices of petrol and diesel. Reliance Industries shut its filling stations in May 2008 as losses mounted.
The company said in January it would reopen all its 1,400 fuel filling stations in a year to regain its 2006 market shares of 14.3 per cent in diesel and 7.2 per cent in petrol. “We believe we can attain those market shares but we do not believe crude will be at its present level for long. So the fuel retail ramp-up will be slow,” the executive said.
Reliance Industries proposes value-added services through a fleet-management programme, cash-flow management, and cashless transactions. Customised loyalty programmes will also be launched.
Many of Reliance Industries’ fuel pump dealers have demanded higher commission and have refused to reopen their outlets. Dealers said they had invested Rs 2-4 crore in their outlets. The cost of land is Rs 1.5-3 crore, and it costs Rs 30,00,000-Rs 1 crore for maintaining services.
“We made huge investments in fuel retail. But we had to shut our outlets in 2008. We will go cautiously this time. We are in no hurry to ramp up,” said a Reliance Industries executive. According to industry players, Reliance Industries has less than 0.5 per cent share of the fuel retailing market.
Other private oil companies like Essar Oil, Shell India, and Mangalore Refineries and Petrochemicals (MRPL) are scaling up their fuel retailing operations, too. Essar Oil has 1,500 filling stations and another 1,400 are being readied. Shell India has around 80 outlets and MRPL will begin commissioning its stations soon.
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The government deregulated diesel prices last October, providing a level field for private and state-owned fuel retailers. Private players have moved to take advantage of the deregulation. State-owned oil refiners Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation control 95 per cent of the fuel retailing market.
Private refiners had entered fuel retailing after it was opened up in 2003. By 2006 most of them had started winding down operations as oil prices rose and it became difficult for them to compete with government-dictated subsidised prices of petrol and diesel. Reliance Industries shut its filling stations in May 2008 as losses mounted.
The company said in January it would reopen all its 1,400 fuel filling stations in a year to regain its 2006 market shares of 14.3 per cent in diesel and 7.2 per cent in petrol. “We believe we can attain those market shares but we do not believe crude will be at its present level for long. So the fuel retail ramp-up will be slow,” the executive said.
Reliance Industries proposes value-added services through a fleet-management programme, cash-flow management, and cashless transactions. Customised loyalty programmes will also be launched.
Many of Reliance Industries’ fuel pump dealers have demanded higher commission and have refused to reopen their outlets. Dealers said they had invested Rs 2-4 crore in their outlets. The cost of land is Rs 1.5-3 crore, and it costs Rs 30,00,000-Rs 1 crore for maintaining services.