News Release Details
BPCL will add 400 outlets by March
New Delhi 25-Jul-2007
Bharat Petroleum Corp. Ltd (BPCL), one of India's largest oil marketing companies, plans to add 400 retail outlets in the current fiscal year in an effort that one expert said would strengthen its retail presence before other companies did so. Apart from other public sector oil marketing companies, relative new entrants Reliance Industries Ltd and Essar Ltd also have petrol station chains. "Our per-outlet investment ranges from Rs40 lakh to Rs4 crore, depending on the location and the size of the outlet," said S.K. Joshi, director, finance, BPCL. He declined to comment on the total investments planned. The company currently has a network of 7,400 retail outlets. India's consumption of petroleum products is around 112 million tones a year. Currently, public sector oil-marketing companies such as Indian Oil Corp., Hindustan Petroleum Corp. Ltd and BPCL have a dominant share of the petroleum products retail business in the country. BPCL registered a net profit of Rs 2,140 crore on a turnover of Rs l,08,836 crore in 2006 07. A Delhi-based oil sector analyst, who did not wish to be identified, said BPCL's decision to expand its retail network was "not a healthy move in the short term." "However, in the long term it may turn out to be a sound decision. This is an attempt by BPCL to beat the rush in terms of location and costing as once the margins turn positive other oil marketing firms will go for an expansion drive," he added. Oil marketing companies in India have been hit by the rise in global crude prices and the government's reluctance to pass this on to the final consumer. Crude oil prices have risen about 143.3% to $73 (Rs 2,935) per barrel over the past three years. BPCL has been losing Rs l, 000 crore a month since April this year. "If no oil-bonds are offered shortly (to compensate the oil companies for maintain prices at artificially low levels) it will affect our first quarter results," said Joshi. Ajay Arora, partner at accounting firm Ernst & Young said currently the marketing margins for "all the oil marketing companies are negative." "There is a distinct possibility of the turnaround in the negative margins as the market situation and the crude prices remain range bound," he added. In another development, BPCL's joint venture with GAIL (India) Ltd is expected to set up a city gas distribution network in Pune by July next year. "We plan to operationalize the project within a year and it will start in phases," Joshi said. The project is being implemented by Maharashtra Natural Gas Ltd and will require an investment of around R$600 crore. It will cater to industrial, commercial and domestic consumers and will entail the setting up of 29 compressed natural gas stations. This is a part of the Rs l0,000 crore capital expenditure that the firm has lined up for the next five years.
New Delhi 25-Jul-2007
Bharat Petroleum Corp. Ltd (BPCL), one of India's largest oil marketing companies, plans to add 400 retail outlets in the current fiscal year in an effort that one expert said would strengthen its retail presence before other companies did so. Apart from other public sector oil marketing companies, relative new entrants Reliance Industries Ltd and Essar Ltd also have petrol station chains. "Our per-outlet investment ranges from Rs40 lakh to Rs4 crore, depending on the location and the size of the outlet," said S.K. Joshi, director, finance, BPCL. He declined to comment on the total investments planned. The company currently has a network of 7,400 retail outlets. India's consumption of petroleum products is around 112 million tones a year. Currently, public sector oil-marketing companies such as Indian Oil Corp., Hindustan Petroleum Corp. Ltd and BPCL have a dominant share of the petroleum products retail business in the country. BPCL registered a net profit of Rs 2,140 crore on a turnover of Rs l,08,836 crore in 2006 07. A Delhi-based oil sector analyst, who did not wish to be identified, said BPCL's decision to expand its retail network was "not a healthy move in the short term." "However, in the long term it may turn out to be a sound decision. This is an attempt by BPCL to beat the rush in terms of location and costing as once the margins turn positive other oil marketing firms will go for an expansion drive," he added. Oil marketing companies in India have been hit by the rise in global crude prices and the government's reluctance to pass this on to the final consumer. Crude oil prices have risen about 143.3% to $73 (Rs 2,935) per barrel over the past three years. BPCL has been losing Rs l, 000 crore a month since April this year. "If no oil-bonds are offered shortly (to compensate the oil companies for maintain prices at artificially low levels) it will affect our first quarter results," said Joshi. Ajay Arora, partner at accounting firm Ernst & Young said currently the marketing margins for "all the oil marketing companies are negative." "There is a distinct possibility of the turnaround in the negative margins as the market situation and the crude prices remain range bound," he added. In another development, BPCL's joint venture with GAIL (India) Ltd is expected to set up a city gas distribution network in Pune by July next year. "We plan to operationalize the project within a year and it will start in phases," Joshi said. The project is being implemented by Maharashtra Natural Gas Ltd and will require an investment of around R$600 crore. It will cater to industrial, commercial and domestic consumers and will entail the setting up of 29 compressed natural gas stations. This is a part of the Rs l0,000 crore capital expenditure that the firm has lined up for the next five years.