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Sunday, Mar 10, 2002

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BPCL to phase out unviable outlets; plans 150 new ones

Archana Chaudhary

MUMBAI, March 9

SIGNS of a post-APM struggle for market share are emerging in the oil sector. One of the majors, BPCL, has decided to phase out over 400 `unviable' retail outlets. It is simultaneously drawing up plans to set up 150 new outlets in promising locations.

"Nearly 10 per cent of our outlets are not doing good business, mostly because of being situated at inconvenient locations. The company has decided to not invest in these henceforth. No, we are not shutting down these ROs right away. Instead, we plan to phase them out over the next three years,'' Mr Rajiv K. Chaturvedi, Executive Director (Retail) told Business Line.

However, the company has plans to set up another 150 new retail outlets in promising locations. Meanwhile, the company, which has a 4,500-strong network of retail outlets across the country continues to acquire dealer-owned outlets in a bid to control maximum retail sites.

BPCL has already "secured" about 61 per cent of its ROs — the highest percentage among the country's oil majors. Of the balance 39 per cent, the company intends to keep only those, which make "long-term sense", according to Mr Chaturvedi. "At most of the strategic locations, the land is either owned by BPCL or we have long lease agreements with the owner. Over the last few years, we have been spending about Rs 200 crore for buying out these sites and revamping the existing ROs,'' he said.

The company also plans to focus on opening ROs along the national highways and in small towns. "We have been looking at sites along the golden quadrilateral, particularly routes which draw about 52 per cent of the total highway traffic in the country,'' said Mr Chaturvedi. The company has identified about 75 to 80 sites along the 10,000-odd km stretch. Oil companies will continue to share distribution infrastructure across the country with product exchange agreements expected to be in place before March 31, he said.

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