Bikes, LCD televisions on offer as 3,000 fuel pumps reopen

Nearly a year after diesel prices were deregulated some 3,000 retail outlets are about to reopen. But it has not been a smooth ride for fuel retailers as private and state-owned oil companies slug it out for customers.

In Gujarat, if you buy diesel in bulk you could win a Splendor motorcycle and if petrol is your choice then an LCD television set, depending on whether it is an Indian Oil Corporation or an Essar Oil outlet. "Companies and retailers have launched schemes one has never heard of. With fuel retailing thrown open last year, we now see companies intensifying their sales pitch," said a fuel retailer in Ahmedabad.
 
According to dealers, bulk buyers and transporters that cart fuel to remote locations find such deals attractive. A fuel retailer with Essar Oil said they were offering an LCD television set every month for fuel purchased in bulk. "Our sales are less than those at public sector retail outlets. So we have launched such schemes to attract customers. There are schemes in place for retail customers also if they buy fuel over and above Rs 300," he added.

Retailers for Reliance Industries, the country's biggest private oil company, however, have stopped offering the discounts they had announced in December 2014.

"We are not selling as much fuel as we anticipated so we have stopped discount schemes. Reliance has increased our commission, though it is not at par with what fuel retailers of public sector companies receive," said a fuel retailer for Reliance Industries.

Reliance Industries was, till recently, offering a discount of Rs 5 on petrol worth Rs 300 and Rs 10 on diesel worth Rs 1,000. For diesel worth Rs 12,000, the discount was Rs 225.

Reliance Industries, dealers said, had increased their commission by 20 paise to 90 paise per litre of petrol sold and Rs 1.78 per litre of diesel sold. The commission to dealers of public sector oil marketing companies is Rs 2.25 per litre of petrol and Rs 1.20 per litre of diesel.

Reliance Industries has reopened around 400 outlets since the diesel price deregulation on October 18, 2014. It now has 1,400 outlets. In May 2008, Reliance Industries had shut its fuel pumps as losses mounted for selling fuel at rates much higher than the subsidised prices of state-owned oil companies. Reliance Industries' fuel retail market share is less than 0.5 per cent.

Essar Oil is planning a total of 5,000 retail outlets, making it the largest private fuel retailer in the country. It has set up 1,500 outlets and has another 1,400 under implementation. It is planning to set up 2,100 outlets beyond these.

Among the public sector players, retailers with Indian Oil Corporation are offering motorcycles to customers if they buy 30,000 litres of fuel from an outlet. "These are sales promotion schemes offered in partnership by the dealer and the company. It is a highly localised marketing scheme and we have launched different schemes for different geographies," said an executive with Indian Oil Corporation.

Indian Oil Corporation is the largest fuel retailer in the country with nearly 24,000 outlets.