Hurdles in the way of MRPLآ’s petrol pump ambitions

Vol 7, PW 19 (03 Dec 03) Midstream & Downstream

Is it any wonder that ONGC is desperate to set up a chain of petrol pumps using products from Mangalore Refineries Forced to export 37% of it petrol and 29% of its diesel, ONGC rightly believes it makes more commercial sense to sell direct to Indian motorists.

But last month, the ministry rejected an ONGC proposal to set up ONGC Values Ltd - a private sector company designed to implement chairman Subir Rahas plan to sell petrol and diesel through a chain of pumps across the country. The ministry wants ONGC to market MRPLs products with its existing management, a top ONGC official tells PETROWATCH.

How can an upstream man sell petrol and diesel Without a marketing team in place, how are we going to set up a retail outlet by our deadline of end-December Low morale has once again engulfed MRPL employees in the face of ministry obstruction. Contacted by PETROWATCH, a senior source justifies the government position.

MRPL is a government company now, he says. It will have to conduct business accordingly and not otherwise.

Yet on 28th November oil secretary B K Chaturvedi heaped praise on the refinerys revival in a meeting with MRPL. Also rejected is ONGCs plan to offer private sector pay packages to its proposed marketing team.

In our proposal Raha clearly explained that in times of competition and to attract the right talent we must offer salaries equivalent to the private sector, reveals ONGC. But instead, the oil ministry wants ONGC to pool talent from its sister PSUs.

We tried that too, he adds. But IOC complained that ONGC and MRPL are poaching its best officials.

If that wasnt enough, the ministry has also killed ONGCs plan to franchise its retail outlets. It will take at least five years for us to strengthen our marketing team.

This beats logic. How can a company like ours with no experience in marketing run a company owned outlet.

This is like tying your hands and ordering you to swim. In May 2002, ONGC received permission to set up 600 petrol pumps and in May this year it received permission to set up another 500.