Reliance Industries reopens a fifth of 1,400 fuel stations

They were shut when PSUs were selling heavily subsidised fuel; will reopen now, buoyed by diesel decontrol

Buoyed by diesel price decontrol, Reliance Industries has reopened about one-fifth of its 1,400 fuel stations, which were shut down when state firms were selling heavily subsidised fuel.

RIL and Essar Oil Ltd, the only other private refiner in India, had together captured about 17 per cent of domestic retail market for diesel and 10 per cent of petrol by 2006 before heavily subsidised sales by state-run firms took a heavy toll on private firms' fuel sales.

"Two hundred and thirty outlets (petrol pumps) already commissioned. Plan to commission entire network within a year," RIL said in an investor presentation post announcing third quarter earnings.

RIL had shut down all of its 1,432 petrol pumps around March 2008 because of huge losses in incurred in trying to match its public sector firms, who sold fuel at rates much lower than their cost as they got government subsidies.

The government in June 2010 deregulated or freed petrol pricing by not providing any more subsidies. This allowed Essar to re-enter the retailing arena, selling only petrol from most of its 1,400 outlets.

Diesel, India's most consumed fuel, was deregulated in October last year and since then private retailers have again entered the market.

Essar started diesel sales from all its outlets and has expanded its network to 1,600, which is likely to go up to 2,500 in one year's time.

"Success Story of 2006 -- Achieved market share of 14.3 per cent in diesel and 7.2 per cent in petrol," RIL said. "Launch of aggressive consumer schemes for quick ramp up of volumes. Target to replicate 2006 performance levels."

The company said it will leverage technology to provide superior customer value across the network with the motto of "Right Quantity and Quality of fuel at the Right price."

RIL had captured the market share in 2006 by owning just 4 per cent of the total petrol pumps in the country. State-run retailers have since then swelled the network to 51,870.

The company is again starting the fleet management program wherein large fleet operators like truckers were given smartcards which their drivers could use buy fuel without cash with deliveries that can be monitored online, thereby eliminating pilferage or theft.

"Fleet management program to help customers with fleet control, cash flow management, cashless transactions and information," RIL said, adding customised loyalty programme for different customer segments will also be launched.

Also, aggressive automation based 'Instant Reward scheme' will provide an edge over the competition, which lacks nationwide automation, it said.

RIL's present network comprises of about 900 retail outlets that are owned by the company and the rest by dealers.