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Private fuel retailers double petrol, diesel market share

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Private fuel retailers like Rosneft-owned Essar Oil and Reliance Industries have doubled their market share in last three years, capturing close to 7 per cent of petrol sales and over 8 per cent of diesel sales.

Oil Minister Dharmendra Pradhan, in a written reply to a question put to him in the Lok Sabha, said private companies were allowed to sell petrol and diesel in March 2002.

From April 2002, fuel pricing was also deregulated. Consequently, Reliance, Essar and Shell set up petrol pumps to directly compete with public sector giants like Indian Oil Corp (IOC).

In the initial years, private firms were aggressive in setting up of petrol pumps.

However, they slowed down once government control over pricing came back in vogue in 2004-05, and they couldn’t compete with subsidised fuel sold by PSUs.

The government freed petrol price from its control in June 2010 and the same for diesel was done in October 2014, giving fillip to fuel retailing by private firms.

Pradhan said private players had a market share of 3.5 per cent in petrol sales and 3.1 per cent in diesel in 2015-16. This rose to 5.3 per cent in petrol and 6 per cent in diesel in the following year.

In 2017-18, private retailers commanded 6.8 per cent market share in petrol sales and 8.2 per cent in diesel, he said.  Private retailers sold 5.18 million tonnes of diesel in 2017-18, up from 1.19 million tonnes in 2015-16, he said.

Public sector oil marketing companies – IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), saw diesel sales drop from 61.76 million tonnes in 2015-16 to 58.29 million tonnes in 2017-18.

During this period, India’s fuel consumption grew by an average of 3-4 per cent annually.

Pradhan said, in petrol, PSU sales rose from 20.95 million tonnes in 2015-16 to 22.39 million tonnes in the following year before dropping to 21.99 million tonnes in 2017-18.

Private retailers, on the other hand, saw petrol sales double – from 767,900 tonnes in 2015-16 to 1.59 million tonnes in 2017-18.

India had 61,678 petrol pumps as of January. IOC operates the maximum 26,752 pumps, HPCL has 14,853 and BPCL 14,293 pumps.

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