The softening in fuel prices has made people drive more. Following growing demand for petroleum products since the crash in Brent crude oil prices from $100 to around $50 and decontrol of diesel in India last year, oil companies are seen sharply ramping up their filling station network to cater to the incremental demand and grow their retail presence.
While the public sector oil companies such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) are jealously trying to guard their forte amidst steep competition, the private sector oil companies namely Reliance Industries (RIL) and Essar Oil , which restarted fuel retailing last year, are progressively re-opening their closed down filling stations and even opening new ones to have a sizable pie of fuel retailing business.
In this financial year alone, more 3,000 filling stations are to be added, either through opening of new stations or re-opening of RIL’s pumps.
RIL has already reopened 450 of its filling stations and the balance nearly 1,000 will be made operational by the end of this year. As demand has grown in India, RIL has reduced its exports as it has started supplying more fuel to public sector oil firms. “Now we are selling more (fuel) in India. It is profitable to sell here. The demand environment in is likely to be good in 2016,” a top RIL official said adding the company would scale up its own fuel retailing network.
Essar Oil has already reopened all its 1,550 filling stations and another 1,600 are under various stages of implementation. “The new ones will be operational within the next 9 to 12 months,” an official said.
Indian Oil, the biggest oil marketing companies in India, has the largest number of filling stations numbering 25,400 as of April, 2015 and in normal course its adds 1,000 new filling stations a year.
Company officials said around 150 new pumps have been commissioned and the balance will be completed in due course.
Last year BPCL commissioned 695 filling stations and as of April 2015 it had 12,809 retail outlets. “We have ambitious plans to commission new outlets this year and in the future,” an official said.
HPCL has about 13,250 filling stations and is adding around 500 new ones this year.
It is believed that the public sector oil companies are working on a strategy to sharply increase their retail network by deviating from the conventional way of allotment of filling stations.
Following the reduction in prices of the consumption of petrol in India has gone up by 12 per cent while demand for diesel has gone up by a modest 2.8 per cent, oil company officials said. The demand of all petroleum products is estimated to be about 160 million tones per annum in India.
In the first half of this year the global oil demand went up to 1.6 million barrels per day as compared to 0.7 million barrels per day in 2014. According to analysts this was mainly due to global economic growth and lower oil prices along with seasonal factors in large consuming countries such as in US, China and India. They said 97 of the gasoline (petrol) demand growth came from these countries. Car sales have also gone up in line.
As the trend goes, you will not go far to fill your fuel tank and there will be a petrol pump closer to your home.
