India: Lower Oil Prices Translates to Viable Petrol Retail Network
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Friday, 16 January 2009 |
Oil prices having come down from $147 per barrel to their current
levels of around $40 per barrel which improves the economic viability
of petrol retailing in India. It is even more crucial for the private
sector, which does not have the option of benefiting from the subsidies
given by the government to the public sector oil marketing companies.
IOC is reported to be closing loss-making service stations, while focusing on increasing throughput. It also plans to improve market share through non-fuel business in its petrol retail network.
Essar Oil is reported to have expanded the number of its petrol retail outlets to over 1,000, with plans to have around 1,400 outlets operational by April 2009. Unconfirmed reports said that Essar claimed a market share of around 4% but was looking to achieve 6%. No time scale was given to this increase.
Shell India which has a petroleum retail licence for 2,000 retail outlets in India, currently has only around 50 outlets selling diesel and petrol. Shell India Marketing is reported to be implementing its parent Shell India's retail initiative, having earmarked Rs250 crore for the first phase of its retail operations.
Reliance Industries Limited last week matched the refining capacity of India's largest refiner IOC, at 1.2 million barrels per day by commissioning the world's sixth-largest refinery at Jamnagar.
It is awaiting a deregulation of petrol and diesel prices before restarting its petroleum retail network, to which the government has reportedly accorded an in principal approval following the crash in crude oil prices. In 2006, with its 1,200-odd retail outlets, Reliance had captured over 14 per cent of the market from the oil marketing companies.
PetrolWorld January 2009
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