Indian Oil losing fuel retail market share to rivals

Indian Oil losing fuel retail market share to rivals
With the state-owned fuel dealers HPCL and BPCL gearing up for better quality fuels and gas supply services, a downward graph can be witnessed in the sales chart of refinery giant Indian Oil Corporation.

Recent reports reveal downfall in the share of fuel retail section of the Indian market thereby trailing behind its counterparts.

According to the stats of Oil Ministry of India 2010-11, there is nearly 53% decline in the share of sales contributed by Indian Oil combining both Petrol and Diesel which was about 54% up to 2009-10.

This accounts for not less than half a million tonne worth of loss for country"s biggest fuel marketer and subsequent profit for Bharat Petroleum and Hindustan Petroleum.

Since the Indian Petroleum sector shares the monopoly only between three public owned entities, such a noticeable shift is bound to catch eyeballs in the market. A tough tide seems to be coming ahead for Indian Oil who would now be required to stretch the gap between prices offered by state owned vendors and private vendors before the government undergoes revision.

To illustrate, private players like RIL or Reliance Industries was forced to shut down its pumps back in 2006 for holding up to 18% of the market share to produce diesel as it sells more than petrol. Consequently, RIL was unable to match to the subsidized price of its state run competitors.

However, it was the cost saving Kisan Seva Kendras set up by Indian Oil Corp. for the rural markets which ushered in a collective sale to overall petrol and diesel sales of about 8 % and 7% respectively.

The share in IOC"s sales of diesel has trailed down from 0.9% to 47.1% this year along with petrol market facing losses up to 44.7%. The bulk consumers on the other hand continue to hold a sustainable ground at 77.5% market share.

IndianOil Corporation added 900 retail outlets, including 575 Kisan Seva Kendras, in 2010-11 while Bharat Petroleum added 600 and Hindustan Petroleum 1,086 petrol pumps.

Yet if we go by the volume of fuel sold, Indian Oil managed a statistical 31.58 million tonne in diesel out of which 22.91 million tonne came from petrol and 8.67 million tonne was a part of direct sales. The overall sale recorded by Petroleum industry amounts to 59.86 million tonne in the year 2010-11.

Read more about: iocl, oil and gas, crude, bse, nse
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