Indian state refiners to open more retail outlets

OREANDA-NEWS. India's state-controlled refiners are planning to increase the number of retail fuel outlets by around 70pc, as their private-sector rivals start reopening their similar operations following domestic fuel price reforms.

State-controlled refiners may add by 2018-19 around 35,000 outlets to sell diesel and gasoline in addition to their existing 52,000 sites, according to the oil ministry. They also plan to add 7,000 LPG distributorships, or around half of the existing number. But profitability may lag their private-sector rivals as many of the outlets are proposed in far-flung areas with minimal demand, as state-controlled refiners are required to provide a certain level of service nationally.

Reliance Industries (RIL) is gradually opening its retail stations after Delhi deregulated diesel pricing last October, while rival Essar Oil has restarted sales of diesel at its domestic outlets.

RIL has already commissioned around 230 of its 1,430 retail outlets, which were shut down a little less than a decade ago as the government reintroduced price controls on diesel.

Gasoline prices in India were deregulated in 2010, following which Essar operated a small portion of its outlets selling the fuel. But diesel is India's largest consumed oil product at 1.2mn b/d. Essar has about 1,400 fuel stations across India, with plans to add another 300.

Essar and RIL had accounted for around a fifth of India's diesel and gasoline sales before they closed most outlets by 2008. RIL had a market share of 14pc in diesel and 7pc in gasoline before it shut outlets.