Oil retailers firm on expansion

The heavy subsidy burden leading to perennial under recoveries in the country's oil retailing sector has not deterred companies from expansion plans. While public sector retailer Indian Oil Corporation (IOC) has fast-tracked its plans to raise money from the market, private sector retailer Reliance Industries (RIL) has expressed hope that it will be able to open new stations as soon as the government announces diesel deregulation. In June, the government decontrolled petrol and said diesel would move into the free price regime shortly. Later in the day, Montek Singh Ahluwalia, deputy chairman of the Planning Commission, said the government's policy was to move "towards deregulation progressively".

RIL shut around 700 of its 1,600 retail outlets in 2008, when the rise in global crude oil prices made the business unviable. The company runs 900 stations in Gujarat, Maharashtra, Kerala, Karnataka, Tamil Nadu, Andhra Pradesh and north-eastern states.

"The moment we have news on diesel deregulation in an authentic manner, we will go for ramping up the number of stations we are running from 900 to 1,600 and further to 2,300, which is definitely on the anvil. We have licence to run up to 5,000 stations," said Vivek Srivastava, senior vice-president, RIL on the sidelines of Petrotech 2010.