With the ministry of petroleum and natural gas planning to free retail fuel prices from government control and link them to global crude oil prices, Mangalore Refinery and Petrochemicals Ltd (MRPL), a subsidiary of state-owned Oil and Natural Gas Corporation, is reviving plans to set up fuel retail outlets, a senior company executive has confirmed.
The company plans to roll out 500 outlets, each of which will cost about Rs 2 crore, and 50 to begin with.
The company had to shelve retail plans because the government declined to support it by subscribing to oil bonds. These bonds are key to the survival of the three government-owned companies that control the fuel retail market — Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum — and sell petrol, diesel, kerosene and LPG at subsidised prices.
Without oil bonds, it is not possible for public or private players to compete with these three companies. Lat year, Reliance Industries decided to close two-thirds of its 1,400 petrol pumps around the country citing unfair price competition from the government-supported giants.
MRPL operates a 9.69 million tonne refinery at Mangalore in Karnataka.
Other players with fuel marketing rights include Reliance , Shell, Essar, ONGC and Numaligarh Refinery. Like MRPL, several are planning a re-entry.
