3,100 more petrol pumps in 2004-05

Oil firms in marketing overdrive.

Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation will add 2,600 retail outlets in 2004-05, making India possibly the world's largest oil retailing market, with 25,000 outlets.

If one adds the outlets planned by Reliance Industries and Essar Oil during the year, the number climbs to 25,500. Oil and Natural Gas Corporation, too, is readying to dot the country with its petrol pumps.

The government has already cleared its plan to set up 800 outlets. The public-sector oil companies have plans to invest a total of Rs 7,000 crore in marketing initiatives in 2004-05, most of which will go into setting up retail outlets.

Indian Oil and Hindustan Petroleum have drawn up plans of Rs 3,000 crore each, while Bharat Petroleum has earmarked Rs 1,000 crore.

"There is no data on what should be the optimum number of retail outlets in the country. However by March 31, 2005, India will have at least 25,000 retail outlets owned by the public sector oil companies," N G Kannan, director (marketing), Indian Oil, told Business Standard.

In December 2003 there were 21,754 retail outlets in the country. Indian Oil will spend Rs 1,348 crore to set up an extra 1,000 retail outlets, Hindustan Petroleum Rs 1,200 crore for 900 outlets and Bharat Petroleum Rs 500 crore for 700 outlets.

S Radhakrishnan, director (marketing), Bharat Petroleum, said, "We will set up the same number of retail outlets as (we did) last year."

Bharat Petroleum was looking at the rate of return at each outlet because "we do not want to eat into volumes by setting up filling points close to each other", he added.

The average throughput of petrol has, however, declined 11.2 per cent and diesel 11.9 per cent per outlet across the industry. But Indian Oil has set its target high. It plans to set up 1,000 retail outlets in 2004-05 against 1,122 in 2002-03 and 343 in 2001-02. At present, the company has 8,820 retail outlets.

Indian Oil was also in the process of changing the identity of its outlets by including its "corporate colours: orange and blue," Kannan said.

Hindustan Petroleum, too, is working on a new retail identity. N K Puri, director (marketing), said, "We are investing heavily in marketing initiatives, Rs 3,000 crore in 2004-05. Of this, Rs 1,200 crore will be used for adding 800-900 retail outlets and for giving a new identity to our existing retail network."

Besides building its network, Hindustan Petroleum is working on eliminating adulteration at the retail level. It would invest in automation at the delivery-end, Puri said.