With the softening of oil prices, Ruias-owned Essar Oil has started reviving its petrol

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pumps but rival Reliance Industries is yet to act.

Essar Oil, which had by May 2005 set up 1250 petrol pumps in the country and together with Reliance Industries' 1490 outlets captured 16-17 per cent diesel market share, has reopened 300-350 petrol and diesel sale outlets in western and southern India, a company official said.

"As we couldn't match the price offered by public sector companies who got subsidies from the government, we decided to freeze our retail plans in May 2005," he said.

Unable to sustain operations, Essar, Reliance and Royal/Dutch Shell last year decided to shut all their outlets.

"This August, we began reopening the outlets and by December we hope to have upto 70 per cent of our total strength operational," the official said.

Reliance, however, has not taken any decision on reopening its outlets.

"At the peak, our outlets were selling 400-500 kilolitres of petrol and diesel a month. Now, we sell 8-10 kiloliters per month," the official said.

Essar sold diesel at Rs 18-20 a litre more than the price offered by state-run Indian Oil, Hindustan Petroleum and Bharat Petroleum, who got paid by the government through oil bonds and discounts for crude oil producer ONGC for selling fuel at a loss.

"Currently, we sell petrol at a price that is Rs 2-5 a litre higher than the PSU competition. Diesel is being sold at Rs 6-10 a litre more depending on the location and distance (from the depot)," the official said.

Essar is the nation's newest refiner, which has a 10.5 million- tonne a year refinery at Vadinar in Gujarat which feeds the retail pumps.