RIL to take on state-run oil firms with technology

To take on its public sector peers in the fuel retailing segment, Mukesh Ambani-controlled Reliance Industries Ltd (RIL) plans to leverage technology.

“We would go for an aggressive automation-based instant reward scheme, providing an edge over the competition, which lacks nationwide automation,” RIL said after its result announcement last week. This was to provide superior customer value across the network, it said.

RIL and Essar Oil face government-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPC) and Hindustan Petroleum Corporation. IOC has brought 6,077 retail outlets under automation.

In May 2008, RIL had closed its fuel pumps owing to mounting losses, as it was selling fuel at rates much higher than the subsidised prices of state-owned oil companies. It has automated 4,408 retail outlets so far.

RIL said it would re-commission its 1,400 fuel retail outlets in a year and planned to replicate its success of 2006 in the segment, with a market share of 14.3 per cent in high speed diesel and 7.2 per cent in petrol. It has re-opened 230 outlets since the diesel price deregulation on October 18, 2014, and has seen diesel demand at its outlets go up 11 per cent between the October and December quarters.

Its fuel retail market share is a little less than 0.5 per cent. The state-run firms control 98 per cent among themselves.

The company is also in the process of launching aggressive consumer schemes for quick ramp-up of volumes. These would include value-added services, cash flow management, cashless transactions and information. Customised loyalty programmes would also be launched.

“RIL and Essar are getting aggressive in the fuel retail segment after the diesel deregulation. So far, there has been a shift of 0.2-0.3 per cent from the market share of state-run oil marketing companies,” said a senior IOC official.

Last month, to attract custom, RIL began offering discounts to customers. According to retailers and dealers, RIL offers a discount of Rs 5 on petrol worth Rs 300 and Rs 10 on diesel of Rs 1,000. For diesel worth Rs 12,000, the discount is Rs 225. An RIL executive confirmed this.

“Post deregulation, our business has picked up pace but we have to provide discounts if we need to attract more customers. There is a misconception among customers that RIL outlets charge more for fuel. We have to dispel these notions if we need business,” an RIL dealer from Gujarat had said last month.