Opening up of auto fuel retailing doesn’t worry us: IndianOil chief
New Delhi 04-Dec-2019
India's largest auto fuel retailer Indian Oil Corporation Ltd (IndianOil) says it is not just about having petrol pumps; the real challenge is to make them work 24x7, 365 days.
The government recently liberalised the fuel retail policy, allowing non-oil companies also to enter the business.
According to Sanjiv Singh, Chairman IndianOil, "Now there is much more opportunity for medium and smaller players to come in. More healthy competition means better service for consumers.
"Asked if IndianOil, which has 28,237 petrol pumps out of 66,408 in the country as on November 1, felt threatened by competition, Singh told BusinessLine: "In terms of competition, the sector is already working on matching global prices - it is not a cost-plus model.
"It is not possible that someone can price a product much lower. I don't think that much cushion is there." While the scope for playing with the retail price may not be much, Singh believes that "there could be scope for improvement in efficiencies - some technology intervention, for instance - and existing players are fairly well-equipped too. It is not just about opening a petrol station in a market.
"The bigger responsibility is to make it work 365 days, 24x7. Incidentally, the existing players have a strong supply line."
Automated outlets
What about players like Saudi Aramco and BP preparing to enter the fuel retail segment? Singh said, "We are fine. It is not just our infrastructure that gives us comfort. Over the years, since 2004-05, when private players first came in, things have changed.
"For example, today, all our retail outlets are fully automated and they are connected through our own back-end networks.
"We are not relying on any other network for every retail outlet. Nearly 50 per cent of our outlets are solarised, so very soon we will not be depending on grid electricity too," he added.
Singh, however, acknowledged that "We are not absolutely at par with international players, but with or without competition, there will be changes in the sector."
Roll-out timeline
Talking about BS-VI fuel and whether there were still any differences with the auto sector on the roll-out timeline, he said,
"There is no dispute. The deadline for both auto manufacturers and oil companies is April 1, 2020. Refineries have also started supplying."
Asked if there was any differences regarding BS-VI and electric vehicles (EVs) with the government, he said: "There is no interference between government plans for EVs and BS-VI fuels. Both are absolutely independent initiatives.
"Initially, there were remarks that beyond 2030, only EVs will be sold. That has been subsequently clarified. There is no change in the stance as far as conventional fuels are concerned."
On the issue of the life of branded fuels with the coming of BS-VI, Singh said, "Branded fuels will remain.
"These fuels are not branded because of sulphur levels. When BS-VI rolls out, the branded fuels will also have lower sulphur levels, but other advantages such as multi-fuel additives will still remain."
Asked if consumers having a BS-VI-compliant vehicle need to go for any other superior grade fuel, he replied: "No, BS-VI grade fuel is good for any vehicle. BS-VI premium will be higher in octane and added advantages. BS-VI vehicles do not require premium grade fuel."
