RIL to restart petrol pump network by March next year

Reliance Industries Ltd (RIL) plans to fully resume its petrol pump network by March next year. The government, after ending diesel subsidies, has given it a level- playing field to compete with state-owned retailers.

“Reliance plans to re-commission the entire network of 1,400 outlets by the end of financial year 2015-16. As on March 31, 2015, over 300 outlets are operational,” the company said in its latest annual report.

The firm had ventured into selling petrol and diesel through a network of nearly 1,400 petrol pumps in 2006 but had to shut operations in 2008, as it wasn’t getting the subsidies extended to state-run operators.

The subsidies made good of the losses that state retailers incurred on selling fuel below market price, aimed at shielding the poor from inflation. The government deregulated petrol in June 2010 and diesel in October last year that paved the way for private operators' entry.

“Post announcement of deregulation, prices of petrol and diesel are being changed in-line with international prices. This has presented an opportunity for RIL to re-enter the domestic retail market and ramp up volumes to compete with local players,” it said.

Between 2006 and now, industry volumes of petrol and diesel sold have doubled from 40 million tonne per annum in 2006 to 80 million tonne. The demand for transportation fuels is expected to grow in line with growth in the country’s Gross Domestic Product (GDP), RIL said.

The retail network has increased from 31,000 in 2006 to over 53,000 outlets with majority owned by public sector units. “Reliance is aggressively investing in restart of its entire network with a focus on quickly regaining market share,” the annual report said.

RIL and Essar Oil Ltd, the only other private refiner in India, had together captured about 17 per cent of domestic retail market for diesel and 10 per cent of petrol by 2006 before heavily subsidised sales by state-run firms took a heavy toll on private firms' fuel sales.

RIL had shut down all of its petrol pumps around March 2008 because of the huge losses it incurred in trying to match public sector firms.

After fuel price deregulation, Essar Oil has begun selling from most of its 1,400 outlets, which it plans to scale up to 2,500 in a year’s time.

Mangalore Refinery and Petrochemicals Ltd (MRPL) on Friday announced plans to enter fuel retailing with 100 outlets. The firm had in 2006 touched a market share of 14.3 per cent in diesel and 7.2 per cent in petrol.

"Aggressive communication campaigns and instant reward schemes have been launched to help create a market buzz and quick ramp up of volumes. Reliance's key differentiator, a unique fleet management programme, Trans-Connect, will also be re-launched with a host of value-added services," RIL said.