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Pushing premium branded petrol
posted by
Vivek Sharma
21 May 2008, 16:29
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labels: public sector, government, energy/oil, branding/marketing
I first saw it in Bangalore, a couple of weeks back. Some of the HPCL outlets had adorned the regular petrol dispensers with shabbily written ‘No Stock’ boards, while the premium branded petrol was readily available. On my way back to the old airport, I kept checking HPCL outlets to see if this is a conscious strategy. I did find a couple which were still selling regular petrol and was disappointed at missing an opportunity to ‘expose’ this new business strategy from the PSU oil firms.
Last week I saw the phenomenon repeating, this time in Delhi. By the time friends confirmed similar sightings in other metros, I had warmed up for a hard-hitting article against creating artificial shortages to push costlier fuel.
Unfortunately, I have to be disappointed yet again as the PSU oil companies have pre-empted my wrath by confirming that it is indeed a conscious strategy. A report in a leading business daily says the oil companies have decided to promote branded petrol and diesel in a big way in the cities.
No, they haven’t admitted to creating artificial shortage of regular fuel. But, having decided to promote the premium version of something as essential as fuel, that is just about the easiest strategy to deploy. No need to admit it! While the ‘premium’ on branded fuel is not big enough to make good the losses of oil retailers, it will definitely bring down the losses – by a rupee or two per litre. That may not appear very significant, but may shave off a couple of thousand crores from the oil subsidies in a year. Good enough even to stop selling regular fuel! When someone suggested the possibility of such a motive, ‘oil industry sources’ dismissed it as ‘asinine’ or silly. The sources claimed the companies are pushing branded fuel purely for altruistic reasons - that is they enhance engine life – even if the customers are denied their choices and have to pay more!
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