Shell to shut down 15 outlets

The outlets that will be shut down are not easily accessible and out of way for supplying fuel. Out of 15 outlets, four are in Karnataka, seven in Tamil Nadu, two each in Andhra Pradesh and Gujarat.

Shell India currently has 50 outlets in India majorly focussed in south India and Maharashtra.

 

Surinderdeep Singh, Managing Director and Retail General Manager, Shell India Marketing Private Limited (SIMPL) said, "We have no plans to leave India and we remain committed to serving our esteemed customer with the highest levels of service at the other remaining sites. Shell remains committed to the fuels retailing business in India and continues to be excited by the growth prospects here. The absence of a level playing field and the high cost of servicing retail outlets spread across a geographically diverse area, have left us no choice but to consolidate our network wherever there are supporting sites nearby for our customers to minimise the inconvenience to them."

He said the playing field must be levelled, as it will bring choice to customers, who are then free to choose between different brands of fuel available.

A company spokesperson said, "Shell entered the Indian market with a retail plan thinking that the government would disband the selective subsidy regime as recommended by the Rangarajan Committee recommendations in 2002.

But it is still to be done. The government needs to ensure that it creates a level playing field for all the industry players. We believe that the government will have a fair policy for all."

Shell had filed a petition with the oil regulator in March this year with two other private players, Reliance and Essar, to set right the anomalies in the oil sector. The company will wait until the market conditions become favourable to reopen its outlets, he said.

In an interview to Business Standard recently, Singh had said, "While the government is subsidising the public sector companies by issuing oil bonds to them, the private sector is left with the burden of sustaining the losses due to rising oil prices in the international market. We are unable to sell petrol and diesel at the prices offered by the public sector companies."

Due to the higher oil prices in the global markets, the private sector companies like Shell are unable to bear the losses, he said adding that Shell is making a loss of Rs 5-6 per litre on motor spirit and Rs 7-8 per litre on diesel.

"We have written a letter to the petroleum regulator to ensure a level playing field for both public and private sector companies so that we can come out of losses and supply fuel on a par with public oil companies," Singh said.

Unable to bear any more losses, Shell had stopped selling main grid fuels which were sold at prices on par with public sector oil companies and has been selling only premium fuel in the country.

In July 2004, Shell India acquired a marketing license from the Government of India, to set up a network of up to 2,000 fuel retail stations in India. Part of the licence conditions was to ensure 11 per cent of all retail outlets are in low and remote access areas.

Till today, the company has invested $1 billion in India. It also has plans to open another 100 outlets over the next one year.