Friday, November, 15, 2019 08:18:47

British oil giant BP Plc and India’s Reliance Industries Ltd are reportedly planning to jointly build about 2,000 petrol pumps in India in the next three years. As per credible sources, the exact arrangement of the venture is still in progress and would be decided in a few months.

In October 2016, BP received a license to install 3,500 fuel retail outlets in India, while Reliance currently runs 1,343 petrol pumps. Presently, India is one of the few largest global markets with rising fuel demands. Many foreign fuel retailers are looking to gain a toehold in a country where state-run companies dominate fuel retailing market.

According to sources familiar with the development, BP is Reliance’s partner in exploration and production ventures within the country. In February 2011, the London based oil major bought 30% stake in 21 oil and gas production-sharing contracts of Reliance Industries for $7.2 billion. The companies had also partnered for India Gas Solutions Pvt. Ltd, a joint venture committed to sourcing and marketing of gas within the country.

In order to get a license that permits retailing auto fuel in India, a company must invest a minimum of INR 2,000 crore into exploration and production, gas or product pipeline, refining, and terminals. Reliance Industries owns licenses to open 5,000 petrol pumps in India and is planning to double its market share in the Indian fuel retail market, which is presently 6%.

The companies are planning to build their retail outlets on the national highways. Reliance is optimistic about the business, considering the country’s present fuel demand scenario. Having petrol pumps on the highways will be attractive for Reliance since it is an underserved segment in the country.

However, government’s move to reduce fuel prices by INR 2.50 a liter could be a dampener for the private sector, reported sources.