India’s fuel retailing sector is poised for unprecedented competition with Russia’s Rosneft and Britain’s BP Plc set to operate petrol pumps with global best practices, which can shake up the statedominated sector and give consumers international quality service. Armed with fat balance sheets and welcoming government, these aggressive oil biggies can challenge the dominance of state firms, which have 95 per cent share in the business. This will also pose a stiff challenge for Reliance Industries, which also has a presence in fuel retail. Pump owners and state firms are already talking about how foreign firms can snatch their customers with sleek marketing, branding and international quality services.
BP Plc has just received a license to set up 3,500 pumps, while Rosneft will inherit 2,700 retail outlets following a deal to acquire Essar Oil. Foreign oil producers, struggling with low oil prices for two years. “BP and Rosneft can put up a big challenge for the incumbents. If they are willing to spend, they can expect a fast roll out. With the government ready to welcome them with open arms, they shouldn’t face many hurdles in securing supplies or expanding the network,” said Amresh Kapoor, former executive director at Indian Oil Corporation (IOC).
“Foreign players could introduce many global best practices that would help raise the service level and act as the key differentiator.