The three refining majors -- IndianOil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum -- along with IBP, Madras Refineries and Cochin Refineries have been directed to go in for these outlets to commemorate 50 years of India's Independence.

Sources told The Financial Express that while IOC, BPCL and HPCL have been asked to go in for at least 11 outlets each, the number would be five in the case of IBP and one each for MRL and CRL. The total number of 40 can be increased "at a flexible basis" to 51 and the oil companies are free to do as and when they wish to.

Current information updates indicate that both MRL and CRL plan three outlets each and have begun the spadework in this direction. It is still not clear if Bongaigaon Refinery and Petrochemicals (BRPL) will also be part of the process but it is likely that the company will qualify as this is the first time that stand-alone refiners have been allowed to get into direct marketing. All these outlets will be situated on the highways and have been so planned to satiate a long-felt need of (night) drivers.

The concept is unique in the sense that each of these outlets will not solely vend petro products but will have other features like a shopping mart, motel, restaurant and swimming pool. "While the shopping market theme has already caught up here in outlets of BPCL and HPCL, the idea of a motel operated by oil PSUs is something totally new to India," sources said.

All the sites planned will be company owned-company operated (Coco) and the investment will be in the range of Rs 3 crore or more. The oil companies have advertised extensively for outright purchase or lease of land and the response is believed to be "overwhelming." However, the entire process of selection, preparation and eventual commissioning will take a year or more.

There are some areas of concern. The investments for these retail outlets is quite considerable and given that at least Rs 3 crore will have to be earmarked for each site, it would work out to over Rs 30 crore each for IOC, BPCL and HPCL. In the case of IBP, this would be Rs 15 crore and Rs 9 crore for MRL and CRL.

The big question mark remains -- is the investment worth it for the oil companies given that returns could be slow in coming? Also, the whole concept of a motel and restaurant is new to them and would involve a lot of spadework in locating big names in the hotel business who would act as franchisees and handle operations.

"This would be a complex task and would require a great degree of expertise and luck in selecting the right man for the job," sources said.

The other area of concern is the money to be earmarked for companies like IBP, MRL and CRL. Though none of their officials were available for comment, observers believe the going will be tough and in the case of IBP, in particular, Rs 15 crore could be better spent doing up its existing outlets.

The issue is one of making a worthy investment and nobody is really sure if the concept will find takers immediately.

Sources say IOC and BPCL have volunteered to help out MRL and CRL in putting up these outlets. The response of these stand-alone refiners is not known though experts say it is to their advantage to avail of these offers as in the long run, the government could well approve of a strategic alliance of IOC and MRL and the same with BPCL and CRL.

Safety would be another area of concern for oil companies as these outlets have been planned for the highways and, would, hence be vulnerable to dacoities. In such cases, the government, in consultation with the petroleum ministry, may need to work out a comprehensive insurance package for the companies.