Priced out, Reliance to close 1,400 petrol pumps by April-end

25 March 2008

Mumbai: Private sector refiner Reliance Industries, hard put to match fuel prices offered by state-run retailers, plans to close its 1,400 petrol pumps nation-wide by April-end.

Reliance, the country's largest oil refiner, has sent internal mails to its petrol pump operators about the phased closure. The company will not replenish petrol and diesel stocks once the existing lot at its retail outlets get exhausted, industry sources said.

Reliance suffered huge refinery losses despite selling petrol and diesel at prices higher than the public sector retailers Indian Oil, Hindustan Petroleum and Bharat Petroleum.

Petrol and diesel sold at Reliance outlets costs Rs4-5 a litre more than those sold by the PSUs, who get compensated by the government. Reliance still lost Rs3.4 a litre on petrol and Rs5.8 per litre on diesel. Its market share also fell from 14.3 per cent to less than one per cent in diesel.

Public sector lose Rs9.68 on sale of every litre of petrol and Rs12.21 a litre on diesel but the losses are partially made up by issue of oil bonds by the government and discounts on crude from ONGC, Gail and Oil India.

Reliance is believed to have invested about Rs4,000 crore in setting up nearly 1,400 petrol and diesel pumps all over the country. Of these, Reliance owns and operates about 900 outlets.