The Hindu Business Line : Reliance undecided over fuel retail business

Reliance Industries is yet to take a call on the future of its fuel retail business, which was grounded during the last crude spike. Though crude prices and product have softened recently, the company is far from bringing its prices to the levels offered by PSUs due to inventory loss involved.

There are no plans to use retail fuel outlets wholesomely for any other business purposes as well.

While watching the crude and product price movement closely, the company has decided to continue its existing scheme of offering 12.5 per cent return on investment to its dealers and franchise as part of the compensation package and wait for return of stability in crude prices.

Asking for subsidy

Efforts are also under way to convince the Government for offering subsidy in line with the PSU oil companies. Meanwhile, sources said that the company is considering cutting down prices of petrol and diesel by Rs 1 to Rs 1.50 by next month.

Since, Reliance previously priced fuel sold by outlets Rs 2.5 over and above the PSU oil companies, the proposed move would reduce the price difference to Rs 1-1.50. The initiative is understandably an effort to keep the sentiments on fuel retailing alive.

Sources, however, feel that since diesel — consumed mostly by the commercial vehicles — constitute most of the sales by reliance outlets, sales are unlikely to pick up unless and until prices are brought at the industry level.

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