After the support from diesel price decontrol, Mukesh Ambani-led Reliance Industries Limited will soon reopen all of its 1,400 petrol pumps in this financial year.
State of Reliance Industries in the past
Apart from Reliance Industries, Essar Oil Limited is the only private refiner in the country. By 2006, the two companies together had taken over around 17% of domestic diesel retail market 10% of petrol. Post that, they faced a heavy setback when government-run retail outlets started receiving heavy subsidies. This resulted is decreased sales for the private companies.
As a result, Reliance Industries had to shut all of its 1,432 fuel outlets in March, 2008. The state-run outlets sold the fuels at much lower price than the private companies due to the subsidies. As Reliance Industries failed to survive the competition, it shut its loss-bearing petrol pumps. In June, 2010, the government deregulated petrol and announced of not providing subsidies any more. This enabled Essar to re-open its shut outlets. The largest consumed fuel, diesel was deregulated in October, 2014, after which the private players bounced back in the market.
In 2006, Reliance Industries was able to garner 14.3% market share in diesel and 7.2% in petrol market. The company is hopeful that its market share will be significantly higher than that, soon. It owned only 4% of the petrol pumps at that time. The state-run retail outlets had then increased their network to reach at a number of 51,870 outlets.
Plans of Reliance Industries
In an investor presentation, Reliance Industries announced its profits of the third quarter and then informed about the fuel retail outlets. It said that more than 320 fuel outlets have already been re-opened and the company is aiming to re-establish all the 1,400 outlets by March, 2016.At present, Reliance Industries is the owner of around 900 retail outlets. The remaining ones are owned by dealers. The company said, “Target aggressive volumes in the bulk diesel market post de-regulation.”
Reliance Industries has planned to aggressively make use of technology to offer superior customer value across all of its outlets. The company said that it will give the best experience to customers by making efficient use of people, technology and process together.
For this, Reliance Industries will again initiate its fleet management program. Under this program, commercial vehicle owners, such as truckers will get smartcards. The drivers of the vehicles will be able to buy fuel with the cards eliminating the need of cash. The owner of the vehicles may monitor the transactions online, thus eliminating the chances of theft.
According to the company, the fleet management program will offer better control of the fleet, cashless transactions and cash flow management. Besides, the company also mentioned of launching customized loyalty program for customers belonging to varied sections.