The Hindu Business Line : IndianOil plans to set up 3,000 low-cost pumps

INDIANOIL, the biggest oil retailer having close to 10,000 outlets in the country, is now planning to set up 3,000 low-cost `Kisan Seva Pumps' across the country in the next couple of years.

Apart from bringing diesel to the doorsteps of the agricultural population, the pumps will offer a range of agri-inputs, consumables and other necessities that are in demand in the rural areas. The company has already tied-up with ICICI Bank for providing banking facility at all such outlets.

"We propose to set up Kisan Seva Pumps with the object to tap the high and middle income agricultural population with custom built products and services", said Mr N.G. Kannan, Director (Marketing) of IndianOil.

"Our strategy is to let our outlets emerge as the distribution hub for rural India," he said.

The company has decided to develop each pump at an investment of Rs 5 lakh. Apart from diesel, the pumps will also market LPG. Each pump will have a shopping mall named Kisan Seva Kendra offering a wide range of products, including seeds, fertiliser, pesticide, consumables and banking facilities.

Generating adequate non-fuel revenue is said to be a major reason behind IOC's initiative in the rural market. Unlike in oil companies operating in the developed countries, non-fuel segment contributes merely one per cent of IOC's total business. The corresponding average in the developed countries is as high as 30 per cent.

"Except in major cities, and that too in select localities, there is limited scope to generate non-fuel business through our regular outlets. The situation, however is different in rural India where the retail sector is yet to develop," Mr Kannan added.

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