The Hindu Business Line : Indian Oil to focus on retail consolidation

The ffocus will now be on consolidation of the retail business through value-added services and tapping the rural market by expanding the Kisan Seva Kendras (KSK).

The group will end the year with a retail network of about 15,000, up by about 100 per cent from 7,700 outlets in 2002.

Apart from acquisition of IBP Ltd with its 1,566 outlets in 2002, the growth has been largely organic. Both IBP and IOC went on expanding the retail network through opening of more outlets. IBP was the most aggressive and expanded its network by 120 per cent to 3,409 since acquisition. IOC added about 1,000 outlets a year since 2002.

"The country has 29,600 outlets and any further expansion of outlets would only bring down the per pump throughput," Dr N.G. Kannan, Director-Marketing of IOC, told Business Line, adding that he does not envisage any further opening of regular outlets (in the urban semi-urban and highway markets) of both IOC and IBP in foreseeable future.

"The future focus is on consolidation of business through value-added services such as installation of electronic dispensers, quality improvement, dispensing branded fuel, cashless re-fuelling, vehicle tracking and others," he said.

The group has already issued over one million XtraPower cards, launched to offer cashless re-fuelling as well as vehicle tracking system for fleet owners.

While IOC had launched `Operation Everest' to improve the services of its retail network, a similar strategy, `Operation Horizon', was recently taken up at IBP.

Under the project, 500 IBP pumps will be offering value-added services latest by 2007. The trial run for the project will be launched in January 2006. The effort is also on to make branded fuels available at 1,000 outlets by the end of this fiscal.

IOC, however, may fall short of its target of adding 1,000 pumps this fiscal. "We think we will be ending the year with 600 such rural pumps this year," Dr Kannan said.