Essar Oil to set up 5,000 fuel outlets by 2008

Essar Oil Ltd, part of the multi-diversified Essar Group that has forayed into petroleum retailing a year back, is now targeting to open 5,000 petrol pumps by 2008.

This is in addition to the 502 outlets already commissioned by Essar Oil across the country.

Essar Oil has also decided to give emphasis on the franchisee model in setting up retail outlets rather than the company-owned-company-operated, said a senior company official.

Prashant Ruia, managing director of Essar Oil told Business Standard, "Essar is the first private sector company in India to set up retail outlets in over 100 years. The expansion of the retail outlets is going along very smoothly. We are not hurrying up the things, but we are going ahead steadily."

"We have opened 502 fuel outlets across the country, including 110 in Gujarat, so far. Our immediate target is to open 2500 fuel outlets by third quarter of 2006 when we expect the refinery at Vadinar to be commissioned. The next goal would be to open 5000 outlets by the year 2008," he said sharing Essar Oil's retail marketing strategy.

Saying that Essar Oil will mainly concentrate in opening petroleum outlets on a franchisee basis, Ruia said, "Our aim is not at simply increase the number of fuel outlets. Our goal is to create Brand Essar. We do not want people coming to our outlets to get fuel just because it is the nearest one. We want people to come to Essar outlets, with a confidence that they would get the best quality and pure fuel."

"Apart from marketing of motor spirit and diesel through the retail network, Essar Oil also plans to provide add-ons such as motels, dhabas, ATMs, cyber cafes, spare part shops, rest rooms, and drinking water/toilet facilities, to add value to these retail outlets. Essar would also enter direct market for supplies to bulk industrial consumers," he added.

Essar has a tie-up with Castrol for marketing Castrol brand lubricants. being sold through Essar Oil's retail outlets.

"Most of the petrol pumps in India are owned and operated by the oil companies, while some are owned by the companies but are operated by the dealers. Essar strategy, however, would be to open maximum number of outlets on a franchise basis. Except for a few, all the 500-odd outlets we have opened so far, are franchise outlets," he said.

"So far, we are selling only the normal petrol and diesel at the Essar outlets, but we also intend to start sale of premium fuels at these outlets in the very near future," he added.

Essar is planning to launch premium petrol and diesel. The company plans to sell premium petrol at the price of unleaded petrol. Essar group has interest in sectors such as steel, shipping, power, oil & gas, telecom, and constructions.