BPCL sets aside $9.5m for petrol station retail drive

Vol 16, PW 7 (18 Oct 12) Midstream & Downstream

Bharat Petroleum is determined to steal a chunk of IndianOil’s massive share of the fuel retail business in Assam, Meghalaya, Mizoram, Tripura, Nagaland, Arunachal Pradesh and Manipur.

IOC currently dominates with 72% market share in India’s conflict-prone northeast, notorious for widespread unemployment and poor infrastructure. Hindustan Petroleum is second with 10%.

But BPCL has increased its market share from 4.5% to 15.6% since August 1, after taking direct control of 65 petrol stations run by subsidiary Numaligarh Refinery. This takes BPCL’s tally to 125 stations in the region, with 60% in Assam and 40% spread evenly across Meghalaya, Nagaland and Arunachal Pradesh.

By March 2013, it plans to add 75 more, of which 80% will be in Assam. In the following fiscal, it wants to add another 100, this time with 70% in Assam and the remaining 30% divided among other states.

Expect BPCL to spend Rs50cr ($9.5m) on it fuel retail expansion, which will take the number of stations it operates in the northeast up to 300 by March 2014. If all goes well, BPCL’s market share will rise by up to 25% from 2013 and again to 32% by 2014.

Why is BPCL so confident it can win business from IOC “Our petrol stations are in better locations,” explains a company source. “All the new stations will come up in good locations near high traffic areas.

” BPCL, he adds, is encouraged by government incentives to businesses willing to risk working in undeveloped states. BPCL also has a not-so-secret weapon: the 3m t/y Numaligarh Refinery in Assam.

“Numaligarh gives us assured supplies of petrol and diesel,” we are told.