Pvt oil cos will now find bulk diesel sales lucrative
Private fuel retailers — Essar Oil, Reliance Industries and Shell India — represent less than 10% of India’s fuel retail business, with government-owned companies Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation dominating the industry.
Private companies have invested substantially in setting up retail outlets but have been forced to underutilise their network as they cannot pass through the cost of diesel, which is the mainstay for all fuel retailers.
Essar Oil, which has around 1,406 retail outlets, has only 1,200 outlets operational, while Mukesh Ambani-owned Reliance Industries, which has around 1,470 retail outlets, runs only 450 at present. Shell India, the only international energy company licensed to build and operate fuel retail outlets in India, runs around 35-40 retail outlets across six states.
Essar Oil MD & CEO LK Gupta welcomed the partial deregulation but said the need of the hour was complete deregulation of fuel prices and allow market forces to set the benchmarks in tandem with global oil prices.
Analysts say the major beneficiaries of the diesel price hikes could be state-run producers such as Oil and Natural Gas Corporation and Oil India, as they have been selling crude oil and associated products at huge discounts and could be allowed to charge higher prices.
State-run oil marketers would also gain from the
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