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MRPL to roll out 120 fuel retail outlets

The subsidiary of Oil and Natural Gas Corporation says has blueprint ready for retail expansion in Karnataka in first phase

Kalpana Pathak  |  Mumbai 

Mangalore Refinery and Petrochemicals Limited (MRPL), the wholly-owned subsidiary of state-run Oil and Natural Gas Corporation (ONGC), will roll out 120 fuel retail outlets in the first phase of its retail expansion strategy.

A senior company official said the company is ready with a blueprint for 120 retail outlets to be rolled out in its base state, Karnataka.

“We are keeping a plan ready to roll out 120 retail outlets. As and when the government deregulates diesel, we would start rolling it out. Given that we would not be compensated for selling fuel at a lower than market price, we want to test the waters with 120 retail outlets first,” the official said.

MRPL has approval to set up 500 retail outlets and its parent company ONGC has an approval to set up 1,100 retail outlets. On Thursday, the company reported a net loss of Rs 454 crore in the June quarter on the back of foreign exchange losses.

The loss of Rs 454 crore in the April-June quarter was, however, lower than a net loss of Rs 1,521 crore in the corresponding period a year ago.

The company earned $2.94 on turning every barrel of crude oil into fuel in the first quarter as against a negative gross refining margin of $4.15 a barrel in April-June 2012.

Turnover rose 19.8 per cent to Rs 16,134 crore while export rose 16.6 per cent to Rs 6,928 crore.

Mangalore Refinery and Petrochemicals processed 3.3 million tonnes of crude oil at its Mangalore refinery, up from 2.9 million tonnes in the first quarter last year. The 15 million tonnes a year refinery is being expanded to 18 million tonnes, which is 99 per cent complete.

In June 2010, when the Union government deregulated petrol prices, MRPL’s management breathed a sigh of relief.

MRPL has three retail outlets operating under the HiQ brand in Mangalore, Karnataka. It entered the fuel retail segment in 2008. Setting up an outlet costs Mangalore Refinery and Petrochemicals Rs 5 crore.

For expansion, the company planned to follow the dealer-owned and operated pattern.

It has an approval in place since 2006 from the union government to set up 500 retail outlets. The government is firm in that it would not give any compensatory bonds (for retailing petrol fuels below market price) to MRPL.

“Though we are selling petrol at our retail outlets, we are looking at alternative fuel options and awaiting more clarity on diesel,” the official said.

MRPL says it wants to be a significant player in fuel retailing, but being a stand-alone refinery, which is not part of any oil marketing company (OMC), it does not get compensated for losses by the government. Besides, if it prices its products at market rate, cheaper fuel from OMCs make its retail outlets uncompetitive. The company had, a few years ago, acquired some land to expand its retail network, but returned the same to the respective state governments due to ambiguous policies on fuel retailing.

Other than Mangalore Refinery and Petrochemicals, Reliance Industries, Shell India, Essar Oil and Numaligarh Refinery are the private players in the oil marketing segment.

Three public sector — Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation — have 90 per cent of India’s fuel marketing segment.

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First Published: Thu, August 15 2013. 21:58 IST