Essar Oil to cap retail outlet expansion

Essar Oil, the biggest private sector fuel retailer, will stop adding retail outlets after achieving the target of 1,700, due to uncertainties in the fuel retailing business. The company has 1,640 retail outlets, including 1,388 operational and 252 under construction.

In a telephonic interaction with Business Standard, company CEO and Managing Director Naresh Nayyar said, “We do not wish to expand further. We will control expansion of retail network so long as auto fuel deregulation does not happen. There is lot of uncertainty in terms of auto fuel pricing”.

He said even though petrol price was deregulated last June, pricing does not happen in tune with international price changes. After petrol deregulation, the company has been able to increase its sales sharply even though the volume is low.

In the July-September quarter of current year, petrol sales grew 125 per cent over same quarter last year. The company posted a net loss of Rs 166 crore for the second quarter compared to a net profit of Rs 130 crore last year.

Revenue for the quarter grew 11 per cent to Rs 13,805 crore. The company had a forex loss of Rs 407 crore in the quarter against a forex gain of Rs 115 crore in same quarter last year.