To expand its footprint in auto and piped natural gas retailing, Essar Oil has tied up with Aegis Logistics, Elf Gas and SHV to roll out auto LPG dispensing stations in the country.
At present, nearly all gas retailing, auto and piped, is with public sector units such as Indraprastha Gas (IGL) and Mahanagar Gas (MGL). Industry players say private companies like Reliance Industries, British Gas and Adani Energy have expressed interest in retailing gas.
Essar has already signed a memorandum of understanding with Aegis Auto Gas, an LPG importer. Aegis has an LPG import facility in Mumbai, from where it will supply the auto gas to Essar. Aegis is to set up an auto LPG dispensing station at Essar Oil’s fuel retail outlets. The company is likely to make an announcement to this effect tomorrow.
Also, for a pan-India presence, Essar has tied up with state-run GAIL to set up retail chains to dispense Compressed Natural Gas (CNG). The company also plans a joint venture with Sabarmati Gas (SGL)— promoted jointly by Gujarat State Petroleum Corporation and Bharat Petroleum Corporation — to set up CNG dispensing units at Essar outlets in Gujarat.
The facilities will be installed by SGL, but will be managed by Essar Oil.
The new auto LPG stations are part of the 300 new filling outlets being constructed by Essar Oil. To begin with, the new stations will be concentrated in Western India.
“We prefer the auto gas segment, since the pricing is not directly regulated. However, tariff for domestic gas consumers is determined by the Petroleum and Natural Gas Regulatory Board. We don’t want our gas business also to end up like the petroleum retail business,” an Essar Oil official had told Business Standard last month.
According to the norms, refineries are made to supply the LPG produced by them to state-owned public sector units for distribution to domestic consumers (as there is shortage of LPG in the country).
