Fuelling expansion: As election nears, govt allows oil PSUs to open 55,000 more fuel pumps

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Mumbai | Updated: November 26, 2018 8:53:27 AM

OMCs have issued advertisements for selection of dealers across the country through an online portal to set up petrol pumps in emerging markets like highways, agricultural pockets and industrial hubs.

electric vehicle, Indian Oil Corporation, Ola Cabs, Murali Srinivasan, CAGR, news, India newsThe expansion is expected to generate an additional employment of 5.5 lakh over the next five years.(Source: Reuters)

Public sector oil companies – IOC, HPCL and BPCL – are planning to double their fuel retail outlets in the next five years by adding another 55,000 outlets to meet the growing demand of petrol and diesel in the country. The companies have issued advertisements across the country for selection of dealers through an online portal to set up petrol pumps in emerging markets like highways, agricultural pockets and industrial hubs. Besides, the retail outlet network in rural, remote and far-flung areas are also being expanded to supply products, predominantly, high speed diesel into these areas.

As of now PSUs own a total of 55,649 fuel retail outlets. Indian Oil owns 26,982, BPCL owns 15,802, while HPCL has 12,865 outlets.

The expansion is expected to generate an additional employment of 5.5 lakh over the next five years.
The retail expansion is happening after a gap of four years and it is for the first time the government has introduced a simplified online application form where no documentation is required till the time of selection of the dealer. The eligibility norms have been relaxed with no requirement of land at the time of application, or a bank balance of Rs 25 lakh balance in accounts. Though they will have to offer land post selection.

Unlike in past when companies owned and operated majority of outlets, this time around 60% of the outlets have been offered on dealer-owned-and-dealer-operated model, while companies will keep only 40% to themselves, where the operation will be through either themselves or through dealers. “The objective is to reach the maximum far-flung and remote locations,” B Sundar Babu, general manager, sales at HPCL told FE.

The selection of dealers will happen through draw of lots for dealer-owned outlets, while the company-owned-dealer-operated outlets will be through bidding process.

“For the dealer owned outlets, there is a refundable fixed fee of Rs 15 lakh for regular outlets (On highways, urban centres), while a non-refundable fee of Rs 5 lakh for rural outlets. While for the company-owned outlets, the regular sites will attract a non-refundable fee of Rs 30 lakh, and the rural sites will have to pay a fee of Rs 10 lakh,” Babu said.

“Keeping transparency of operation in mind all the new outlets will be fully automated with complete digital mapping of dispensation and storage operations on the back-end. Besides, the process is underway to convert all the existing manual outlets into digital operated outlets by December 31,” said Shubhankar Sen, general manager (sales) for Maharashtra and Goa at BPCL.

Maharashtra will get a total of 6,765 outlets out of which 5,612 outlets will be in regular (highways and urban centres) while 1,153 outlets will be in rural areas.

“An outlet on highway is expected to cost anywhere between Rs 6-8 crore on an area of 4-5 acre. While rural area would be lower depending on the location,” said Sen.

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