JOIN USRIL to restart fuel outlets this year
Government-owned fuel retailing companies including IOC, BPCL and HPCL could have serious competition soon. Private sector giant Reliance Industries (RIL) is planning to restart most of its fuel outlets over the next one year.
According to sources, RIL said that it plans to open majority of the fuel outlets over the next year in an analyst meet, post its quarterly results on Friday. Only 230 of around 1,400 of the company’s fuel outlets are currently operational.
RIL also told analysts that it plans to match the oil marketing companies in terms of pricing. The company is targetting to replicate its performance in 2006 when it achieved a 14.3 per cent share in diesel sales and 7.2 per share in petrol sales.
The company plans to launch aggressive consumer schemes for quick ramp-up of volumes. It is also planning to use extensive IT infra to provide value-added experience to consumers.
Reliance Industries had decided to close its retail outlets 6-7 years back, following mounting losses due to pricing pressure from state-owned oil companies. A steep decline in crude prices has prompted RIL to look at reopening its outlets.
“Margins in fuel retailing have become very attrative for RIL as crude prices have declined significantly, and that is why, they are looking at re-entering fuel retailing business very seriously,” an analyst from a domestic brokerage firm told Deccan Herald.
The company will not be entirely dependent on exports which will certainly help the financials going forward as domestic margins are better, the analyst added.
RIL had reported a 4.5 per cent decline in consolidated net profit for the third quarter ended December 31, 2014, at Rs 5,256 crore and a 20.4 per cent decline in net turnover to Rs 96,330 crore.
RIL told analysts that it is looking at reducing capital expenditure in shale ventures in the next fiscal to the tune of 35-40 per cent. The company also said that its plans to sell stakes in mid-stream joint ventures will not be hampered due to a significant drop in crude oil prices.