Essar Oil to open 400 petrol pumps in UK in 3 years

Only Indian firm to own a refinery in Europe, opened its first petrol pump at Coalville in Leicestershire last year in November

Essar Oil UK plans to grow its network of petrol pumps in the United Kingdom to 400 in three years to capture about 10% of the market share.

The company, the only Indian firm to own a refinery in Europe, opened its first petrol pump at Coalville in Leicestershire in November last year and has added six more services stations since then.

"We plan to rapidly scale up the retail network to 400 sites over the next three years," Essar Oil UK Executive Chairman Naresh K Nayyar said.

UK has some 8,593 petrol pumps. Of these 5,613 sites are owned by dealers and Essar is trying to win over some of them.

"We have the advantage of owing a refinery in UK as well. So we are telling customers that the fuel they get is directly from the company's refinery," said S B Prasad, Essar Oil UK's chief commercial officer.

The Ruia family controlled Essar Oil had in 2011 acquired the Stanlow Refinery in Cheshire from Shell and turned it around.

"As one of only six refiners in the UK, Essar is able to leverage its manufacturing strengths to provide quality products at value prices direct from Stanlow refinery to dealers rather than through third parties," Nayyar said.

Prasad said the UK retail sector had changed markedly over the last few years as the hypermarkets had grown and traditional oil majors moved away from refinery ownership.

"This provided an opportunity to offer a new, clean, fresh brand, backed up by quality products direct from a manufacturer with an unrivalled pedigree," he said.

Stanlow currently produces over 16% of the UK's road transport fuel demand, including three billion litres of petrol, 4.4 billion litres of diesel and two billion litres of jet fuel per year.

"A distinctive brand offering was developed for the UK market, with a curved totem pole providing a unique effect which is clearly identifiable from the roadside.

"In conjunction with this distinctive design, larger scale pricing LEDs and clear and obvious space for convenience branding delivers maximum visibility and awareness of the offer to customers," he said.

Prasad said the sites it has taken over have seen significant sale volume growth of between 20 to 150%.

The company's fuel retail venture in UK will be mainly a dealer-owned-dealer-operate (DODO) model. But the company could have a small number of company-owned-dealer-operated (CODO) outlets.

Nayyar said the response from both the dealers and consumers has been "very positive and we are looking to build on this initial momentum to drive rapid growth of our network".

Prasad said the company would in the next few months have about 15 sites or petrol pumps and by the end of the year it is looking at 100 outlets.