Date:03/11/2005 URL: http://www.thehindubusinessline.com/2005/11/03/stories/2005110302430200.htm

Back IOC eyeing rural areas to expand retail business

Richa Mishra

New Delhi , Nov. 2

ATTRACTED by better margins and the huge untapped market, the state-owned Indian Oil Corporation Ltd has worked out an aggressive strategy to give its retail business a push with a thrust on the rural areas.

In 2004-05, IOC made investments of Rs 91.06 crore in the retail business. The company's plan outlay for the business for 2002-07 is Rs 764 crore.

IOC's retail forays are planned under an umbrella offering "Xtra", and a series of initiatives, including branded auto fuels, are already on the roll. During 2004-05, IOC expanded its retail outlets to more than 10,000. Over 1,100 retail stations were added during the last financial year and the company plans another 1,000 this year, a senior IOC official said.

Segmentation: The official told Business Line that segmentation is the name of the game for the retail business. The company is clearly demarcating its retail business into three broad segments — the urban market, the highway market and the rural market.

The company has also rationalised its infrastructure facilities, closing down redundant storage depots even as it commissioned new facilities wherever required, he added.

While the branded XtraCare retail outlets would primarily meet the requirements of the urban areas, Swagat brand retail outlets are targeted at the highway motorists.

For the rural market, IOC plans to roll out over 1,000 Kisan Seva Kendras this year.

Kisan kendras: At present, IOC's countrywide retail network of petrol, diesel and kerosene dealership caters to over 50 per cent of the fuel needs of rural India. The Kisan Seva Kendras would primarily market auto fuels, and SERVO lubricants, along with agro products such as seeds, fertilisers, pesticides and farming equipment. Nearly 100 such outlets have already been opened and more will follow in the months ahead, the official said.

LPG push: The company is also initiating several steps to take eco-friendly LPG to the rural households in a big way.

On the domestic front, large-scale use of LPG has resulted in a sharp decrease in the use of firewood as fuel, thereby indirectly helping to preserve the environment.