As CNG and EVs expand in cities, fuel retailers look at the rural market

In the last three financial years, 88 per cent of the 16,190 new fuel pumps set up by Indian Oil, Hindustan Petroleum, and Bharat Petroleum were located in rural areas and highways

With the share of more economical fuel options like CNG and electric expected to rise in urban areas, fuel retailers hope to expand their footprint on rural roads and highways, Times of India (TOI) reports. There has also been a shortage of land to open petrol pumps in cities.

During the last three financial years, 88 per cent of the 16,190 new fuel pumps set up by the three-state run retailers, Indian Oil, Hindustan Petroleum, and Bharat Petroleum, were opened in rural areas and highways, the report added.

Rural areas and highways had almost an equal share of newly opened fuel pumps. While 7,087 new fuel pumps were opened in rural areas, another 7,232 were opened on rural highways. On the other hand, only 12 per cent of the new pumps were built in Urban areas.

 

People who track industry developments said that the shift in trend is part of the strategy that is taking the expansion of CNG and EVs into consideration. Expensive real estate was another reason for more fuel pumps opening in rural areas.

An official with one of the oil companies said, "There are few takers for petrol pumps advertised in urban areas. Landowners find shopping arcades or residential complexes more lucrative than running petrol pumps on their plots because of skyrocketing real estate prices."

The expansion of CNG networks and EVs is another reason, as they are eating into urban petrol and diesel sales, the TOI report said.

Given the circumstances, rural areas and highways present an attractive opportunity because of the rising intercity commute. The fast development of highways and expressways, robust farm sector performance and easier land availability further support this.