Country’s second largest private refiner and marketing company, Essar Oil, will expand its chain

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of retail fuel refill stations. The Ruias-owned company proposes to operate 1,500 outlets by end of this financial year.

“Currently, 1,294 retail outlets are operating and we have a target to expand it to 1,500 by the end of this fiscal,” S Thangapandian, chief executive officer (marketing) of Essar Oil told Financial Chronicle. The company sells more than one lakh kilo litres fuel every month through its retail outlets. Nearly, 70 per cent of the fuel sold is diesel.

Essar Oil produces nearly 12.5 - 13 million tonnes of petroleum products. “Around 30 per cent of our produce is exported, the rest sold in the domestic market. Almost, 100 per cent of our LPG, diesel, kerosene and sulfur are sold in the domestic market,” said Thangapandian. The oil marketer also sells close to six million tonnes of products to government-run oil marketing companies.

“We are selling at par with PSUs vis-à-vis pricing our products in seven states, elsewhere the differential is between Rs 0.50 to 2.00 per litre of motor spirit and high speed diesel,” said the Essar marketing chief. He said that his company operates on a revenue neutral model. When the crude prices are high, product prices are higher than the PSU prices. We don’t match (with state-run fuel retailers) but the prices are linked to international crude prices, he said.

Government-owned companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL) are selling petrol at a loss of Rs 3.06 a litre, diesel at Rs 1.56 per litre, kerosene at a loss of Rs 17.23 per litre and LPG at a discount of Rs 299.01 a cylinder.

When asked if Essar Oil plans to export more products, Thangapandian said the markets are volatile and decision to sell in domestic or export is taken based on long term strategies.

The company expects a level playing field for fuel retailing among privately held firms and government entities. “We are positive of a level playing field in the future. We are positive that we can adapt market driven fuel prices. When most of our products are driven by market driven prices including the critical products like food commodities, fuel prices have much less impact then,” said Thangapandian.