With losses from its retail business mounting gradually, which was affecting the company’s bottom-line every year, Assam based Numaligarh Refinery Ltd (NRL) has finally decided to exit from retail marketing business.
All its 74 ‘Energy Stations’, as its retail outlets are called, out of which 66 are located in North Eastern Region, would be handed over to its parent company Bharat Petroleum Corporation Ltd (BPCL) by this month end. However, though BPCL would take over the operations of the retail outlets, the branding, which contains NRL logo, would remain the same. BPCL is the majority stakeholder in NRL with 61.65 per cent stake, followed by OIL (26 per cent stake) and Assam government (12.35 per cent stake).
Speaking to Business Standard, AK Bhattacharya, general manager (marketing and corporate planning) of NRL, said: “We are in the process of handing over the petrol pumps of BPCL. Already half of them have been handed over and rest would be done by this month end.”
Bhattacharya said that in the last fiscal, the company incurred loss of Rs. 183 crore from its retail business. He added that it was becoming difficult for NRL to remain competitive when it was incurring such huge losses from its retail business. (Though the company incurred losses from its retail business, overall NRL made profit in the last fiscal, which would be soon announced in its upcoming annual general meeting)
Unlike other public sector oil marketing companies, NRL does not enjoy any financial support and assistance from the Centre for compensating the under-recoveries that it incurs. Moreover, though NRL enjoys the financial incentives under the Centre sponsored North Eastern Industrial and Investment Promotion Policy, cuts in excise duty of petroleum products in past affected the company’s profit margins.
NRL had entered the retail marketing business in 2004-05 and soon became a top-ranked retail brand in the North Eastern market. The company’s outlet situated at Jorabat, near Guwahati, had been one of the highest dispensing outlets in the country for years. Average sales per outlet of NRL fuel pumps were far higher than those of other oil marketing companies in North Eastern Region for last few years.
NRL was set up at Numaligarh in Upper Assam’s Golaghat district in accordance with the provisions made in the historic Assam Accord signed on 15th August 1985, which then brought an end to six years of violent student uprising in Assam against illegal infiltration from Bangladesh.
