The Hindu Business Line : Shell India seeks regulator’s help for level playing field in pricing

Chennai, March 24 Shell India Marketing Pvt Ltd, the first MNC that is allowed to retail automotive fuels, hopes that something positive would emerge from Petroleum and Natural Gas Regulatory Board (PNGRB), on the petition filed by three private oil companies — Reliance, Shell and Essar.

The petition asked the regulator to initiate adjudication proceedings against the oil PSUs that indulge in unfair and restrictive trade practices in the sale of transportation fuels.

Speaking to Business Line on the sidelines of a recent promotional event Shell Magic with Ferrari, at one of its outlets here, the Managing Director of Shell India, Mr Surinderdeep Singh, said the company was “bleeding” due to skyrocketing crude costs while, unlike oil PSUs, not being compensated by oil bonds.

“We feel that it is not right to give valid licence and then say you cannot have subsidies and bonds. What is happening in India is against competition policies. The bonds and subsidies are directed to Indian consumers and not oil companies. Why should an Indian consumer have a choice between fuel outlets? We were trying to see if a level playing field would be created, but we saw it was not happening. Therefore, we approached PNGRB,” he said.

The current status, according to him, is that the three PSU oil companies have asked time till mid-April.

It may be noted that since inception Shell India had four products, Shell leaded and super in petrol and Shell regular and premium in diesel.

Mr Singh said the company had been keeping the cost of main grade fuels at par with PSU, hoping that the situation would improve, “with the Government treating us all fairly.” As it did not happen the company was forced to take severe steps, he said.

Since December 28, the company has refrained from selling main grades as it felt that it “could not take the bleed any longer.” At that point in time, the loss was about 15 US cents per litre and now it was about 25 US cents.

“Certainly, no business can sustain that kind of bleeding on a long term. Now, all our outlets sell only the premium grades – super unleaded and diesel extra. Even now, we are losing money since the crude price crossed $110 per barrel. However, at this point in time we are minimising the bleeding,” he said.

While the premium petrol (Shell super) and diesel (new Shell diesel extra) at Shell outlets in Chennai costs Rs 57.60 and Rs 47.80, respectively, similar ones cost Rs 51.02 and Rs 35.02 at PSU fuel outlets.

Customers looking for main grade fuel might have left Shell already as the sales during January-February dropped to around 15 per cent compared to corresponding period last year, he said.

More Stories on : Petroleum | Retailing

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page