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Level-playing field needed in Indian petroleum retailing: RIL

Written by: Staff

Mumbai, Aug 2 (UNI) In the context of soaring crude prices in the recent past, there exists an urgent need for a level-playing field amongst public sector and private sector oil companies in the field of Indian petroleum retailing, according to a press release issued by the Reliance Industries Ltd (RIL), here today.

The Government of India has decided to provide subsidies to public sector petroleum retail companies. As per estimates, the Government of India (GoI) provides Rs. 5.77 per litre of subsidy for diesel sold through outlets of PSU oil companies, while the private sector oil companies have been kept out of the ambit of the Government sponsored survival package, the release lamented.

Partially, to part compensate the losses thus incurred due to absence of a level playing field, Reliance Industries Limited (RIL) increased the price of diesel by Rs. 2.5 per litre over the rates offered by Public Sector Unit (PSU), who enjoy subsidy benefits.

This increase, after accounting for a higher dealer commission and state and central levies is equivalent to less than a quarter of the subsidy provided to PSUs by GOI, the release disclosed.

Even with this differential in pricing, RIL is incurring substantial losses in retail marketing, and this in turn has affected the operations and consequent revenues of RIL dealers.

Over the past three years, RIL has set up a nation wide extensive Petroleum Retail Outlet network throughout India with over 1250 retail outlets. Out of these, RIL owns and operates more than 400 outlets, the release informs.

RIL's value proposition of assured quality and quantity (Q&Q) backed with top-of-the line service at its outlets found instant acceptance with consumers nationwide. In short span of less than 3 years, RIL garnered around 15% of the Diesel (HSD) market in India.

Its Channel Partners, close to 800 Dealers, who too have made significant investments, is setting up their respective petro-retail outlets have benefited immensely from the high productivity of RIL Outlets, the release stressed.

RIL empathizes with its channel partners' and considers their well- being of utmost importance and is doing everything possible to ensure the same. Even as a long-term solution to create a level playing field in the petroleum marketing sector is awaited, RIL has taken adequate steps to ensure short term relief for its channel partners. These include waiving-off network usage charges and substantial increase in diesel margins. Further, the company has agreed to bear the cost of interest on loans for 3 months and has even negotiated with banks to re-schedule their loan repayments, the release added.


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