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Essar Oil will soon diversify into retailing of liquefied petroleum
gas (LPG) for automotives. This will be done through the existing
petrol retail network in India.
S Thangapandian, chief executive officer (marketing), Essar Oil, said,
"The company has a target of setting up 6-10 auto LPG dispensing
stations this year." Later, depending upon the response, the number
will be increased, he added.
Essar Oil is under discussions with some private players such as SHV
Energy and Total Oil to source LPG and a final decision
will be taken soon. The company, which has 1,174 active fuel retail
outlets across the country, will take this count to 1,250 by September.
"All the 76 new outlets will come up mainly on the highways of tier II
towns," Thangapandian said. No new outlets have been planned in metros
as the option is not a viable one, he said.
Thangapandian said the company would invest close to Rs 30 crore in
ramping up retail operations in the next financial year. "We are also
talking to some food joint companies to offer their services through
our outlets," he said. Besides, it is close to tying up with State Bank
of India for offering ATM services at the fuel outlets. The measures
are part of Essar Oil's plan to offer value-added services through its
retail outlets to bring in more customers and generate brand loyalty.
"We are also planning to provide medical facilities through our
outlets," Thangapandian said. He said the company is selling about
100,000 kilolitres of fuel - petrol and diesel - per month, which means
90 kilolitres per outlet a month. "This is below the industry average
of 128-130 kilolitres per month that PSU companies sell and we plan to
reach that number by December," he said.
Essar Oil sources petroleum products from its refinery in Vadinar and
from PSUs. "Our product portfolio comprises 50% from our own refinery
and 50% from the PSUs. We also sell marginal volumes of kerosene to
PSUs," he said.
Thangapandian said the fuel retail industry is growing at a rate of
2-3%, driven by petrol that is growing at 8-9%, followed by diesel at
3-4%. "Our refinery also has the ability to produce aviation turbine
fuel but due to lacklustre demand and a negative growth, we are not
producing it," he said.
PetrolWorld 300309
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