After keeping its petrol pumps shut for nearly a year, Indiaâ€™s largest refiner, Reliance Industries Ltd (RIL), is all set to restart its fuel retailing business. Starting early next week, Reliance, which has over 1,400 pumps across the country, will reopen the retail outlets in phases, starting with Maharashtra and Gujarat.
â€œWe are talking to all companies for sourcing of products,â€ PMS Prasad, head of Relianceâ€™s petroleum business told Hindustan Times. â€œSome preparatory work has also been done at the retail outlets, but we have not taken any decision on starting our pumps full steam.â€
Ironically, even after becoming the countryâ€™s largest maker of petroleum products, Reliance will have to source petrol and diesel for retail from other refiners. This is because both its refineries at Jamnagar in Gujarat are â€œonly-for-exportsâ€: RIL cannot sell Jamnagar fuel within India.
Jamnagar-1 refinery is an export oriented unit while Jamnagar-2 is a special economic zone refinery. The EOU status of 660,000 barrels per day Jamnagar-1 will end in March, 2010 after which it can start selling fuel from here within the country. In case RIL chooses to sell the fuel in the domestic market, it would attract double excise and customs duties, making the fuel costlier by Rs 9-10 a litre.
A senior official in one state-owned refinery confirmed his company had indeed received a communication from Reliance for entering into a product supply agreement.
Prasad also confirmed having held talks with private refiners including Essar Oil and Mangalore Refineries and Petrochemicals Ltd, as also PSU oil firms Indian Oil Corp, Hindustan Petroleum Corporation and Bharat Petroleum Corporation.
The Mukesh Ambani-controlled company shut all its petrol pumps a year ago after sales dropped to almost nil, as it could not match the subsidised prices offered by the public sector competition. With crude oil prices at $149 a barrel in June, 2008, the losses Reliance sustained from fuel retail had become unmanageable.