IOC to focus on rural areas for retail outlets

Indian Oil Corporation (IOC) - the country's largest oil marketer - is planning to set up the bulk of its 1,600 new retail outlets planned during 2007-08 in rural areas.

These outlets would have Kisan Seva Kendras (KSKs) or farmer service centres attached to them to sell various products and services to rural customers.

"At least 1,000 rural outlets with KSKs would be set up during the year," said IOC's marketing director GC Daga.

The products on offer will meet the demands of the rural population, such as fertilisers, pesticides, seeds and other utility products required by farmers.

Indian Oil commissioned 1,202 new petrol/diesel outlets in 2006-07. Currently, it has 16,607 petrol and diesel stations with 1,422 KSKs. The target is to take up the number of KSKs to 5,000 by 2012.

In the urban market, the company will open more than 100 small-sized convenient stores with an investment of over Rs 200 crore during 2007-08, said IOC officials.

For some outlets in Mumbai and Delhi, the company has tied up with private players such as Domino's Pizza and the Kishore Biyani Group to offer shopping and dining for customers. Similar tie-ups are being planned in various urban outlets to unlock the real estate value of IOC's outlets.

"Non-fuel revenue will contribute significantly to IOC's turnover in the coming years," said a senior official of the company.

In terms of outlay, the company is planning an investment of Rs 1,500 crore for strengthening the marketing infrastructure in the next five years.

IOC, which controls 10 of the 19 refineries in India, is the market leader in fuel sales in the domestic market with 48.74 million tonnes (46.22 million tonnes in previous year) of petroleum products sold during 2006-07.

Thanks to brands such as Xtrapremium petrol and Xtramile diesel, IOC has a market share of 57 per cent in branded diesel and 44 per cent in branded petrol in the domestic market.

It also fuels about 1,500 aircraft every day, through 101 aviation fuel stations and controls 63 per cent of the aviation fuel market in the country.

Brand loyalty programmes such as the Xtrapower fleet card recorded transactions of over Rs 25 crore per day on average, according to IOC's 2006-07 annual report.

The company recently completed the merger with IBP and has decided to maintain the brand identity of IBP to create more value for IOC products.