RIL to reopen fuel retail outlets

Reliance Industries Ltd. (RIL) is reportedly going to reopen its petrol pumps from today to restart its fuel retailing business after almost a year. Initially, the functionality of petrol pumps will be started from Maharashtra and Gujarat and then in rest of India in phased manner. The company had shut them down owing to heavy loss.

According to sources, for the reopening of over 1,400 petrol pumps, Reliance is reportedly talking with some Oil Marketing Companies (OMCs) for sourcing its retail outlet. Sources also say that RIL is also looking for selling or leasing its all retail outlets to state-run OMCs especially Indian Oil Corporation Limited (IOCL). However, there is no official confirmation.

There are also reports that for buying petrol and diesel or to refill its petrol pumps in Gujarat and Maharashtra, Reliance is talking with IOCL and Ruias owned Essar oil limited.

The talks is also on with other public and private oil marketing companies like Bharat Petroleum (BP), Hindustan Petroleum (HP), Mangalore Refinery and Petrochemicals Ltd (MRPL), in search of a best deal.

RIL, which has India’s largest refineries at Jamnagar (Gujarat) cannot inject fuel oils in its own petrol pumps because Jamnagar Refineries is tied with ‘only-for-exports’ status. The company can only sell Jamnagar fuel inside India after March 2010, when the status ends.

If the company wants to sell the fuel prior to the defined date then would attract more excise and custom duties by up to Rs.8 to 9 higher than state-run OMCs’ rate. Furthermore, the government had already denied to provide any subsidy or financial aid to any private refineries and OMCs except three state run OMCs: IOCL, BP and HP.

As per earlier reports, to shun this higher cost of fuels, Reliance was reportedly talking to state run OMCs to make a joint venture with them, so that it could get the benefits of government subsidy, sources said.

Last year, when the prices of crude oil was soaring high, Reliance had asked for government subsidies on selling oils at its retail outlets to counter the increasing prices of international crude oil but government had denied to aid, which compelled the largest private oil firm of India to shut down all its retail outlets.