Date:22/01/2005 URL: http://www.thehindubusinessline.com/2005/01/22/stories/2005012202180300.htm

Back Pvt petro outlets fare better with small network

Pratim Ranjan Bose

Kolkata , Jan. 21

Since April 2002, when the dismantling of the administrative pricing mechanism took place, four PSU oil companies have together set up close to 5,000 retail outlets, the bulk of which have come up since April 2003. This development has led to a growth in sales but at the cost of a drop in throughput per petrol pump. The sole exception is IBP which has expanded its network most aggressively in 2002-03 and 2003-04 and has recorded a rise in throughput.

The private players, namely Reliance and Essar, with a small network of roughly 550 outlets (against a total of 24,906 outlets of IOC, BPCL, HPCL and IBP), are however, comfortably placed for the time being. With more than 300 outlets, RIL has a monthly throughput of 380 kilo litre (kl) followed by Essar with 291 kl during April-November 2004.

But, the average throughput of the four PSUs is a mere 164 kl, down from 190 kl in 2003-04 and 220 kl in 2002-03. Sources in the PSU oil sector have blamed the one-year stabilisation period required by the new outlets, which has reportedly had a negative impact on the average.

Among the PSUs, BPCL recorded the highest throughput per petrol pump with 201 kl, down from 212 kl. The company was, however, the least aggressive in expanding its retail network during the year, adding just 484 outlets. It also witnessed the lowest growth in the sale of both motor spirit and diesel among the oil PSUs.

According to HPCL sources, the company's strategy of rapid network expansion had paid dividends in this financial year. The network had grown by 814 outlets, to over 6,300 in December 2004 but the per-pump throughput had declined from 165 kl to 156 kl. The sources said the company hoped to correct the situation within a year.

With the largest retail network of 9,772 pumps, IOC had registered a 4.7 per cent drop in throughput from 169 kl to 161 kl. Sources said the company had put up 634 new outlets during April-November during the current year (in addition to approximately 900 outlets in 2003-04) and had registered a growth in sales of motor spirit by 4.7 per cent and 7.2 per cent in diesel. IBP registered a 1.5 per cent rise in throughput to 136 kl. The company had also achieved the highest growth in auto fuel sales this year. Doubling its network to 3074 in three years, IBP has set up over 1000 new outlets between 2002-03 and 2003-04, the throughput per pump dropping from 212 kl to 134 kl by the end of the last year.