State-run Mangalore Refinery and Petrochemicals Ltd (MRPL) — a subsidiary of ONGC — is considering revisiting its fuel retailing plan, which seems viable following the decontrol of petrol prices.
“MRPL is planning to revisit the auto fuel retail plans… especially petrol, as it is being periodically adjusted to global prices,” industry sources said. Sources indicated that the issue could be discussed during MRPL’s board meeting scheduled later this month. The company plans to open around 100 outlets over two years.
The company had got the approval in 2006 to set up 500 outlets but operates only three in Maddur, Hubli and Kadri Hill in Karnataka under the HiQ brand. Initially, MRPL plans to open outlets around its refinery in Mangalore to minimise logistics cost. MRPL, which had formed a joint venture with Ashok Leyland for retailing, had put off its plans following a spike in global crude prices and an announcement by the government that it would not compensate the company for selling fuel below cost.
The joint venture — called Mangalam Retail Services Ltd — now plans to set up outlets across various national and state highways in south India. The outlets will distribute petroleum products and lubricants and have facilities for servicing trucks, buses and commercial vehicles. Other facilities will include bulk lube dispensing, sale of spare parts, dormitories, rest rooms, fast food centres, shopping centres, ATMs and extension counters. Each outlet will cost over `2-3 crore and the company will follow the dealer owned and operated pattern.
Diesel pricing
The big push in fuel retailing will come only after the government allows oil firms to sell diesel at market-linked prices. Diesel is sold at a price, which is around 36 per cent lower than petrol. Many auto makers are also rolling out diesel vehicles in keeping with the consumer demand.
At present, three PSUs — Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd — dominate the fuel retailing segment. Reliance Industries, Shell India, Essar Oil, ONGC and Numaligarh Refinery also have marketing rights. The three state-owned firms have about 35,000 petrol stations in the country, while the other operators have around 2,400 outlets, but many of them are non operational because of the skewed fuel pricing policy in favour of the PSUs.
The approach paper to the Twelfth Five-Year Plan (2012-17) has pitched for aligning fuel prices with global rates as “misalignment” imposes “burden on the exchequer and the oil firms”.
The state-owned marketing companies, that are theoretically free to decide petrol prices, chose not to pass on a `1.80-per-litre loss this fortnight, primarily on the advice of the government in view of the upcoming Assembly polls.
“MRPL is planning to revisit the auto fuel retail plans… especially petrol, as it is being periodically adjusted to global prices,” industry sources said. Sources indicated that the issue could be discussed during MRPL’s board meeting scheduled later this month. The company plans to open around 100 outlets over two years.
The company had got the approval in 2006 to set up 500 outlets but operates only three in Maddur, Hubli and Kadri Hill in Karnataka under the HiQ brand. Initially, MRPL plans to open outlets around its refinery in Mangalore to minimise logistics cost. MRPL, which had formed a joint venture with Ashok Leyland for retailing, had put off its plans following a spike in global crude prices and an announcement by the government that it would not compensate the company for selling fuel below cost.
The joint venture — called Mangalam Retail Services Ltd — now plans to set up outlets across various national and state highways in south India. The outlets will distribute petroleum products and lubricants and have facilities for servicing trucks, buses and commercial vehicles. Other facilities will include bulk lube dispensing, sale of spare parts, dormitories, rest rooms, fast food centres, shopping centres, ATMs and extension counters. Each outlet will cost over `2-3 crore and the company will follow the dealer owned and operated pattern.
Diesel pricing
The big push in fuel retailing will come only after the government allows oil firms to sell diesel at market-linked prices. Diesel is sold at a price, which is around 36 per cent lower than petrol. Many auto makers are also rolling out diesel vehicles in keeping with the consumer demand.
At present, three PSUs — Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd — dominate the fuel retailing segment. Reliance Industries, Shell India, Essar Oil, ONGC and Numaligarh Refinery also have marketing rights. The three state-owned firms have about 35,000 petrol stations in the country, while the other operators have around 2,400 outlets, but many of them are non operational because of the skewed fuel pricing policy in favour of the PSUs.
The approach paper to the Twelfth Five-Year Plan (2012-17) has pitched for aligning fuel prices with global rates as “misalignment” imposes “burden on the exchequer and the oil firms”.
The state-owned marketing companies, that are theoretically free to decide petrol prices, chose not to pass on a `1.80-per-litre loss this fortnight, primarily on the advice of the government in view of the upcoming Assembly polls.
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