 |
| Image By: Sukhjinder Singh on Pixahive |
Indian Oil Corporation (IOC), the country's largest oil company, may sell part of its approximately 32,300 petrol stations to a joint venture with Malaysia's Petronas in order to capitalise on the company's enormous fuel marketing network, according to its Director (Finance) S K Gupta.
IOC and Petronas have had a 50:50 joint venture for the import of LPG for almost two decades. IndianOil Petronas Pvt Ltd (IPPL), a joint venture, is currently expanding its scope to include fuel and natural gas marketing.
For starters, IPPL will be exempt from the cumbersome fuel pump allotment procedures that compel public sector oil marketing organisations to designate dealers through a lottery draw. The joint venture can immediately select a location and operator on commercial conditions.
During an investor call, Gupta stated, "We have all options open - IPPL can set up new retail outlets, it can set up wayside amenities (at petrol pumps on National Highways) and we can also monetise some of our existing retail outlets by selling them to the joint venture".
IPPL can build fuel stations that sell not only gasoline and diesel but also electric vehicle charging and battery swapping facilities, as well as CNG/LPG and LNG dispensing stations.
This will be similar to the outlets that Reliance Industries and its UK partner BP Plc are constructing.
According to Gupta, a new gasoline marketing sector is emerging, which necessitates operational agility.
IOC, a state-owned petroleum retailer, must distribute dealerships to all qualifying bidders in a lottery. There is no room for discretion.
IPPL can also be used to put upside facilities such as a food court, according to him.
Also Read:
At a valuation of Rs 67,500 crore, Microsoft might invest a significant sum in Oyo!
Find out why Tech Mahindra's CEO salary was slashed by 33% in the last year.
IPPL currently offers LPG to commercial clients who are not permitted to use state-owned energy companies' discounted cooking gas.
IOC owns 32,303 of the country's 77,709 gas stations. In addition, it holds licences to sell CNG to autos and piped cooking gas to homeowners in a number of locations.
IPPL would have its own branding and marketing, according to IOC Chairman S M Vaidya.
When asked if IPPL's move into retailing will hurt IOC's business, he stated that India's energy consumption is expanding and that there will be room for all companies.
"Energy pie is increasing. There is a place for everybody," he stated. "Our (IOC's) market share is intact and IPPL will capture new opportunities."
IPPL will be the country's seventh fuel retailer. The other two public sector fuel dealers are Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL).
Reliance Industries and BP have partnered to form Reliance BP Mobility Ltd, which operates 1,422 petrol outlets across India. The largest private player is Nayara Energy, which is owned by Rosneft and has 6,152 petrol pumps, whereas Shell has 270.
There are 18,766 petrol pumps owned by BPCL and 18,776 by HPCL. MRPL (Mangalore Refinery and Petrochemicals Limited) operates 20 locations.
IPPL has import terminals in West Bengal and Tamil Nadu, respectively. It is also one of India's largest parallel propane/butane/LPG marketers.
(Source: Business-Standard)
0 Comments