Shell to open 100 more outlets this year

Shell India Marketing Private Ltd (SIMPL), the Indian arm of the global energy major Shell, is looking to expand its retail outlet business in the country this year. The company, which has opened 50 outlets from 2004 in the southern states and Maharashtra, aims to open another 100 outlets over the next one year.

Said Surinderdeep Singh, General Manager, Retail, SIMPL, "We have the licence to open 2,000 outlets in India. Till now we have opened 50 outlets and are in the process of acquiring land for another 100 outlets in various cities of south and western India.

Shell will be investing around $1 million for each outlet which excludes the cost of the land. It aims to set up new outlets in Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh, Kerala and Gujarat, he said. Presently, Shell has 13 outlets in Karnataka and the remaining in Tamil Nadu, Andhra Pradesh and Maharashtra.

The company is looking to predominantly expand its presence in the southern and western regions, and go to other parts of the country later, he said. However, the company has not fixed any timeline to complete its expansion to 2,000 outlets, he added.

"We are going slow with the expansion in India because of the dual policy of the Union government. The government has not provided a level playing field in the oil marketing sector. While it is subsidising the public sector companies by issuing oil bonds to them, the private sector is left with the burden of sustaining the losses due to rising oil prices in the international market. We are unable to sell petrol and diesel at the prices offered by the public sector companies," Singh told Business Standard.

Due to the higher oil prices in the global markets, the private sector companies like Shell are unable to bear the losses, he said adding that Shell is making a loss of Rs 5-6 per litre on motor spirit and Rs 7-8 per litre on diesel.

"We have written a letter to the petroleum regulator to ensure a level playing field for both public and private sector companies so that we can come out of losses and supply fuel on a par with public oil companies," Singh said.

Unable to bear any more losses, Shell has stopped selling main grid fuels which were sold at prices on par with public sector oil companies and has been selling only premium fuel in the country, he said.

Singh, who was in Bangalore to participate in the celebrations of Shell's 60 years of association with Ferrari, said, "We have been supplying fuel and additives to Ferrari cars over the last six decades and they are helping us to improve our fuel quality constantly."