Cashless transactions at IndianOil pumps doubled: Chairman B Ashok
New Delhi   29-Dec-2016


Mr. B. Ashok, Chairman, IndianOil

IndianOil will spend Rs 20,000 crore in FY18 to expand its refining capacity, import terminals, LPG bottling plants and filling outlets. The company is also aiming to quickly have digital payment facilities at all its outlets to help in the government push towards a cashless society, chairman B Ashok told Economic Times in an interview. Excerpts:

Crude prices have gone up. Are you expecting major inventory gains this quarter?
In 2016-17, we should not have any undue effect (of crude price movements) and there will be a marginal gain or a marginal loss. For the current quarter, we will have to wait and watch.

How have you been dealing with the shift to cashless transactions at petrol pumps?
Traditionally the business used to be mostly cash driven — almost 80% of the transactions used to be in cash. But the good part of the story is that oil companies were always having certain amount of business in cashless mode. IndianOil has loyalty cards, co-branded credit cards and tie-ups for other digital mechanism, including mobile wallet. But it was not a nationwide conscious effort. Today I am happy to share that we have more than doubled our cashless transactions from what it was prior to demon etisation.

Earlier cashless transactions were not possible in all outlets due to lack of availability of PoS (point of sale) machines. Our first effort was to make sure that cashless was possible in larger areas of business. We have been working on that to get more machines. We are competing with several other businesses in terms of getting PoS machines.

How smooth has been the implementation of the cashback programme on your fuel stations? Is the fuel discount for cashless purchase eating into your profit or you will be able to price the product to factor this in?
Cashless is happening smoothly. We are conscious of the fact (the financial implication) but we have all options open. Our emphasis at present is that people should be able to transition to cashless mode. I don't think this is the right time to say whether it's a (financial) hit because we will have to really evaluate over a period of time what is the total benefit.

November saw a fuel sales spike. How are December fuel sales looking?
There was some spike in November but I think it will normalise with time. In December, I would say it's normal. I don't see any great shift in trend. We think that the diesel sales growth should be around 4-5%.

In fuel retailing business, private players haven't been able to get much market share this time, unlike in the last decade. What has changed since?
Alot has changed. Last time, they were able to have very standardised features in their outlets, they were automated. There were things that were new at that point in time. So we identified our weakness, which was exploited by the private sector at that point in time. I think we have been able to bridge a lot of that gap and pro bably do substantially more than that. If you turn around and look at 25,000 outlets of IndianOil, anywhere in the country, they would look the same. We have upgraded right from the visual aspect of the business to the technology used. We are far more automated.