ONGC eyes fuel retailing, acquires land for outlets
Along with its subsidiary Mangalore Refinery & Petrochemicals (MRPL), ONGC has acquired land in 30 locations to set up retail outlets.
By Rajeev Jayaswal, TNN |
MANGALORE: The waiting period is over for oil exploration major ONGC to foray into retailing of petrol and diesel. Along with its subsidiary Mangalore Refinery & Petrochemicals (MRPL), ONGC has acquired land in 30 locations to set up retail outlets.
Both the companies have, however, adopted a cautious approach while entering into retailing business due to “huge under-recoveries” suffered by oil marketing firms recently. “We have decided to open 30 retail outlets by 2007-08,” ONGC chairman & managing director RS Sharma said.
Most of the retail outlets will be under the MRPL’s brand, while some of them will be owned by ONGC. Outlets are located in southern states mainly in Karnataka, Andhra Pradesh and Tamil Nadu, MRPL managing director R Rajamani added.
Elaborating the strategy behind the retail venture, he said that a presence in retail business would help them in creating “brands” for the companies. While “OvaL” is the brand name for ONGC’s retail outlets, MRPL intends to sell fuel under “HiQ” brand. So far, ONGC has only one retail outlet in the country, located in Mangalore.
Mr Rajamani said that the company was proceeding with setting up of retail outlets, as the retail margins in petrol and diesel had since turned positive. “The company is also considering plans to start ATF marketing to air-lines and setting up auto LPG stations,” he said.
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MRPL, which is expanding its refining capacity from 9.5 MMTPA to 15 MMTPA has, however, decided to put its greenfield expansion plan in the back-burner. “We do have the plan (greenfield expansion) but it will depend on the techno-economic feasibility and demand situation,” Mr Sharma said. “Huge refining capacity is added in the country. In light of this, we need to take a fresh look at what product mix we would like to have to cater to the Asian markets. Accordingly, we will do some correction in the detailed feasibility report (DFR),” Mr Rajamani said.
MRPL has commissioned a new isomerisation unit in its existing facility at Mangalore with an investment of Rs 234 crore.
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