India’s Biggest Oil Firm Will Sell Petrol Pumps To Foreign Firms Under JV: How It Will Work Out?
In a joint venture with Malaysia’s Petronas, Indian Oil Corporation (IOC), the nation’s biggest oil firm, may sell some of its over 32,300 petrol pumps in order to monetize the firm’s vast fuel marketing network, according to its Director (Finance) S K Gupta.
Monetizing Retail Outlet
On Monday, Gupta said, “We have all options open – IPPL can set up new retail outlets, it can set up wayside amenities (at petrol pumps on National Highways) and we can also monetise some of our existing retail outlets by selling them to the joint venture,” During an investor call.
So far, IPPL will be the 7th fuel retailer in the country.
How Would It Work?
In the case of IOC, it has an over two-decade-old 50:50 joint venture with Petronas for the import of LPG.
But now, the scope of this joint venture, IndianOil Petronas Pvt Ltd (IPPL), is being expanded to include fuel and natural gas marketing.
With this implementation, IPPL will not be governed by the tedious petrol pump allotment rules that require public sector oil marketing companies to appoint dealers through a lottery.
So, this joint venture can choose a site and operator quickly and on commercial terms.
In simple words, IPPL can set up petrol pumps with petrol and diesel and also have EV charging and battery swapping points as well as CNG/LPG and LNG dispensing stations.
This will be roughly similar to the outlets that Reliance Industries and its partner BP Plc of UK are setting up.
According to Gupta, the fuel marketing business is opening up that requires agility in operations.
Since, state-owned fuel retailers such as IOC have to allot dealerships through a lottery of all eligible candidates so it does not allow discretion.
Apart from this, wayside amenities such as a food court can be set up with IPPL.
As of now, IOC owns 32,303 out of 77,709 petrol pumps in the country.
In addition to that, the fuel retailer has licences to retail CNG to automobiles and piped cooking gas to households in several geographical areas.