The Hindu Business Line : Parliamentary panel concerned over low sales growth of oil marketing cos

Concerned over the low growth in petroleum products sale by oil marketing companies and other marketing-related lacunae, a Parliamentary panel has asked the Government to constitute an expert team independent of the Ministry of Petroleum and Natural Gas and oil public sector undertakings (PSUs) to look into the issue.

In its ninth report on `Demands for Grants (2006-07) of the Ministry of Petroleum and Natural Gas' presented to the Lok Sabha, the Standing Committee has said that the growth in volume of sales of the products at the outlets of IOC, BPCL, HPCL, and IBP has not been to the desirable extent and suggested that the expert team should suggest corrective measures.

The number of retail outlets has gone up to about 31,000, including about 1,700 of the private sector, from about 18,500 five years ago, when the private sector was not in this business.

An analysis of the sales data pertaining to 2002-03, 2003-04, and 2004-05, reveals that the sale of products, particularly diesel, has registered either marginal or negative growth in case of almost all the oil marketing companies.

The throughput per retail outlets of these companies has also come down from 250-275 kilolitres a month five years ago to 140-145 kilolitres now, the Committee said.

The panel has expressed its dissatisfaction over this state of affairs and felt that there was an urgent need for an in-depth analysis of the situation followed by result-oriented remedial action.

In its opinion, the present situation has arisen because of indiscriminate setting up of outlets by oil marketing companies and failure on the part of the retail companies to prepare any strategy to compete with the private sector.

The panel was of the strong view that unless suitable and timely measures are taken, the situation may further deteriorate.

Besides, it added that adoption of new technology by oil PSUs had not been done in the right earnest.

"Even the Secretary, Ministry of Petroleum and Natural Gas, was candid enough to admit this fact during evidence," the report said.

The panel has recommended that technological applications by oil PSUs should be intensified, including setting up of a centralised monitoring system to track down the movement of fuel vehicles and opening/closing of locking systems.

The frequency of surprise checks should also be increased, it added.

The panel also said that the performance of the `Jan Kerosene Pariyojana' should be evaluated and based on its success, extended to other parts, which would also help in preventing the diversion of kerosene sold under public distribution system for adulteration.