Indian Oil Corporation (IOC), the nation's biggest oil firm, may sell some of its over 32,300 petrol pumps to a joint venture with Malaysia's Petronas with a view to monetising the firm's vast fuel marketing network, its Director (Finance) S K Gupta said on Monday.
IOC has an over two-decade-old 50:50 joint venture with Petronas for the import of LPG. The scope of this joint venture, IndianOil Petronas Pvt Ltd (IPPL), is now being expanded to include fuel and natural gas marketing.
For one, IPPL will not be governed by the tedious petrol pump allotment rules that require public sector oil marketing companies to appoint dealers through a draw of a lottery. The joint venture can choose a site and operator quickly and on commercial terms.
"We have all options open - IPPL can set up new retail outlets, it can set up wayside amenities (at petrol pumps on National Highways) and we can also monetise some of our existing retail outlets by selling them to the joint venture," Gupta said at an investor call.
IPPL can set up petrol pumps that will not just sell petrol and diesel but also have EV charging and battery swapping points as well as CNG/LPG and LNG dispensing stations.
This will be roughly on lines of the outlets that Reliance Industries and its partner BP Plc of UK are setting up.
Gupta said fuel marketing business is opening up that requires agility in operations.
State-owned fuel retailers such as IOC have to allot dealerships through a lottery of all eligible candidates. It does not allow discretion.
Also, wayside amenities such as food court can be set up with IPPL, he said.
IPPL currently sells LPG to commercial customers who are not allowed to use subsidised cooking gas sold to households by state energy firms.
IOC owns 32,303 out of 77,709 petrol pumps in the country. It also has licences to retail CNG to automobiles and piped cooking gas to households in several geographical areas.
Last week, IOC Chairman S M Vaidya had said that IPPL will have its own branding and marketing.
Asked if IPPL's foray in retailing will not cannibalise on IOC's business, he had said India's energy demand is growing and will have space for all players.
"Energy pie is increasing. There is a place for everybody," he said. "Our (IOC's) market share is intact and IPPL will capture new opportunities."
IPPL will be the 7th fuel retailer in the country. Besides IOC, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) are the other two public sector fuel retailers.
Reliance Industries and BP have a joint venture, Reliance BP Mobility Ltd which operates 1,422 petrol pumps in the country. Rosneft-promoted Nayara Energy is the biggest private player with 6,152 petrol pumps while Shell has 270 outlets.
BPCL owns 18,766 petrol pumps while HPCL has 18,776. Mangalore Refinery and Petrochemicals Ltd (MRPL) has some 20 outlets.
IPPL has import terminals at Haldia in West Bengal and Ennore in Tamil Nadu. It is also one of the leading parallel marketers of propane/ butane / LPG in India.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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