Date:26/07/2006 URL: http://www.thehindubusinessline.com/2006/07/26/stories/2006072604990300.htm

HPCL to invest Rs 918 cr in retail network

Our Bureau

IIM-A to study retail outlets of all OMCs

New Delhi , July 25

The Petroleum Minister, Mr Murli Deora, today informed the Rajya Sabha that Hindustan Petroleum Corporation Ltd (HPCL) plans to invest Rs 918 crore on expansion and modernisation of its retail outlets during 2006-07.

Giving details of the investment, the Minister said the company plans to set up 800 new retail outlets during the year.

HPCL will invest Rs 155 crore in setting up new petrol pumps and Rs 174 crore in modernisation and upgradation of existing outlets, he said. The company would spend Rs 217 crore on automation of retail outlets, Rs 175 crore on procurement of equipment and Rs 197 crore on auto LPG and vapour recovery units, the Minister informed.

The Minister of State of Petroleum and Natural Gas, Mr Dinsha Patel, said that Indian Oil Corporation on behalf of all oil marketing companies (OMCs) has entrusted Indian Institute of Management, Ahmedabad (IIM-A), to undertake a study of retail outlets of marketing companies.

The Minister said it was brought to the notice of the Ministry that while the public sector OMCs have expanded their retail outlet network in a big way after the dismantling of the administered pricing mechanism (APM) effective from April 1, 2002, adequate attention has not been paid by them to improve the institutional and technological mechanisms.

This, according to the Ministry, had resulted not only in the reduction in average throughput per retail outlets but also in the number of complaints of malpractices.

Further, the Standing Committee on Petroleum & Natural Gas (2005-06), in its ninth report, has expressed serious concern over the indiscriminate setting up of the retail outlets by the OMCs and consequent reduction in the throughput per retail outlets, coupled with a general deterioration in performance of the outlets.

The Committee had also recommended constitution of an independent expert team to look into the issue and suggest corrective measures to improve the situation.

Accepting this suggestion, the Ministry had asked Indian Oil to engage an independent agency for conducting a study of the retail outlets of the State-owned OMCs. It has also been decided that the study may be completed within a period of two months from the date of commissioning, the Minister said.