Northern region likely to get 1,000 new petrol pumps

Vijay C Roy

Tribune News Service

Chandigarh, February 24

The northern region is likely to get nearly 1,000 new petrol pumps (excluding the ones by private players) as state-owned oil companies are in aggressive expansion mode.

The three public sector oil companies, namely Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), have issued letters of intent (LoIs) as part of their biggest-ever expansion of fuel retail network in Punjab, Himachal Pradesh, Jammu & Kashmir and Ladakh.

Out of all LoIs, the maximum (674) have been issued in Punjab, followed by Himachal Pradesh (162) and Jammu & Kashmir & Ladakh (156). Besides this, Indian Oil has also inked MoUs with the Registar of Cooperative Societies and Jail Department of Punjab to set up retail outlets on their lands.

A letter of intent, as the name suggests, contains company’s intent to appoint an applicant as a dealer at a certain location, subject to his fulfilling certain conditions such as developing land on the specified location, depositing security deposit, arranging working capital and securing a bunch of government licences necessary to operate a pump.

According to sources, to ensure uninterrupted fuel supplies across the region, the companies are moving quickly to select dealers for new pumps that would help double their retail network in just a few years, serve customers better in less-penetrated micro markets and meet the growing challenge from the private sector.

Currently, oil marketing companies have a wide network of 4,606 retail outlets in the region. Interestingly, Punjab has the maximum retail outlets (3,550), followed by Jammu & Kashmir (525), Himachal Pradesh (475), Chandigarh (42) and Ladakh (14) of all the three state-owned oil companies and private players.

Further, the average monthly sale of petrol and diesel is 126 kilolitres per pump in Punjab, the lowest in the region. For Himachal Pradesh, it is 195 kilolitres and it is 169 kilolitres for Jammu & Kashmir and Ladakh. At 800 kilolitres per month, Chandigarh boasts of the highest sales in the region.

On the one hand, increasing number of outlets, especially in Punjab, may facilitate customers, on the other hand, the dealers are worried about their viability, fearing it will be difficult to sustain in near future.

According to sources, the region is one of the most promising markets for vehicle makers and this has prompted the oil companies to expand here. Among three oil companies, Indian Oil is the market leader in retail segment with a market share of 46.8% in petrol and 46.7% in diesel.

Further, in order to ensure transparency and assured quantity of fuel delivery and uniform customer experience across the network, the oil companies have embarked on a major drive of retail automation across the region. Also, all the retail outlets are being connected to automation server using VSAT connectivity, which will help in monitoring RO operations remotely.

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