Kerala looks at petro outlets to soften liquor policy blow

Written by M Sarita Varma | Thiruvananthapuram | Updated: Oct 21 2014, 06:28am hrs
Even as Kerala governments monopoly liquor distribution arm Bevco is busy downsizing its outlets, the states grocery arm Supplyco is stretching out on an ambitous upsizing trip on its petroleum outlet network. Supplyco ( Kerala Civil Supplies Corporation) is readying to emerge the operator of the largest fleet of petroleum outlets in the state.

At present, Supplyco (Kerala Civil Supplies Corporation) runs just 15 petroleum outlets. In a lease arrangement with Indian Oil Corporation (IOC), the Supplyco-run fuel stations will soon be 36 in number, says Kerala civil supplies minister Anoop Jacob. In the intial phase, this will be on annual lease terms, with IOC and gradually, Supplyco would address its business head on, he told FE.

Unlike the 332 Beverages Corporation (Bevco) outlets, which will be gradually phased out, at the rate of 10% per year, the state governments fuel outlets are zooming by more than 100% in a single go. Supplyco has been negotiating for as amany as 21 fuel stations. Two has been acquired, one at Kottayam and other at Kannur.

Kerala, expecting to be bruised in its R8,500-crore liquor revenue kitty, following the new liquor policy, had been scouting around for alternate cashcows to feed its social welfare projects like schoolchildren midmeal programmes and paddy procurement from farmers. Besides, the petroleum retailing expansion, Supplyco is also planning to ramp up its bottled water sales. The marketing infrastructure of Supplyco bottled water and tea will be perked up at bus stations and railway stations, the minister said.

At the rate of R1 lakh per day per fuel station, Supplyco works out an annual additional revenue of R90-100 crore through retailing of petroleum products, when all the proposed acquisitons are in place. Currently, IOC supplies to 1, 300 petrol pumps in the state.

It is the phenomenal jump in motor density in Kerala that stimulated the idea of joyriding the rising fuel demand. The main reasons for the increase in vehicle population are inefficiency of public transport, lack of a mass rapid transport system in the three major cities, cheap vehicle loans and high aspirations defined by Keralas 20-million strong NRI diaspora, says Mahesh Chand of National Transportation Planning and Research Centre.