Reliance Industries Aims to Double Its Market Share in Fuel Retail

Mukesh Ambani led Reliance Industries Limited (RIL) is gearing up to capture a 10 percent market share in the fuel retail business, which will be double of its current market share. RIL is focusing on expansion and aspires to achieve this target in the coming two to three years.

RIL’s fuel retail business

In 2005, RIL had a 12 percent market share in fuel retail. Then, the crude oil prices started rising exponentially. RIL, being a private company did not get the benefit of subsidies that State-run oil companies enjoyed. Thus, in a period of nine years from 2005, the market share of RIL fell to 0.5 percent.

In June 2010, the government deregulated petrol prices and diesel prices were deregulated in October 2014. After this, RIL gradually started to make its fuel retail outlets operational again. The company currently holds a 5 percent market share in fuel retail.

Between 2004 and 2006, RIL set up 1,470 fuel retail outlets at the cost of INR 5,000 crore. Of these, 1,221 outlets are operating right now. The company has planned to reopen the remaining 249 outlets by the end of this year.

According to analysts, RIL sold Gulf Africa Petroleum Corp. this year, which was its South African venture in fuel retail and this indicates that RIL would be looking to expand the fuel retail business in the domestic market.

RIL’s future plans

As per a report, two officials have shared that RIL is planning to achieve a market share of 10 percent in the next two to three years, effectively doubling its current market share.

As per the officials, RIL is working on several plans to achieve its target. They revealed that RIL is exploring the markets where it is not represented in, which mostly consists of areas other than urban markets.

Analysts opined that RIL may be considering expanding its network to operate 2,500 to 3,000 outlets. This number would depend on commercial viability. The company may have up to 5,000 fuel retail outlets as it holds the licenses for this number.

In the end of Financial Year (FY) 2016–2017, RIL reported that its fuel retail revenue rose by 60.2 percent to INR 33,765 crore. The company also announced its plan to invest INR 2,500 crore in the form of capital expenditure to expand its number of fuel retail outlets.

In a press statement, Mukesh Ambani led Reliance Industries Limited (RIL) revealed that in the third quarter of FY 2016-2017, it had a throughput of 300 kiloliters per month (klpm) which is 85 klpm more than the previous quarter.

Till date, RIL has 448 outlets which are completely operated and owned by the company. According to the company’s plans, these outlets are set to be increased by 52 more in this financial year.

About RIL

RIL is an oil refinery company with its main plant located at Jamnagar. The twin refineries at Jamnagar export fuel and also supply it to Indian retailers.

Summary

RIL is planning to increase its market share in the fuel retail segment by twice to acquire 10 percent of the total market share.

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