Mukesh Ambani led Reliance Industries (RIL) will commission all of its 1400 fuel retail outlets in a year's time and plans to replicate the success of 2006 in the fuel retail segment by mopping up a market share of 14.3 per cent in high speed diesel and 7.2 per cent in petrol.
RIL, has re-opened 230 outlets since the diesel de-regulation on October 18,2014. It has 1,400 fuel retail outlets across the country. At present, RIL's fuel retail market share is less than 0.5 per cent.
In its presentation to analysts post its third quarter results last week, RIL said "It is launching aggressive consumer schemes for quick ramp up of volumes and targeting to replicate 2006 performance levels." RIL posted a drop of 4.5 per cent in consolidated net profit at Rs 5,256 crore for the quarter ended December 2014.
In the presentation, RIL said it has seen diesel demand at its outlets go up 11 per cent quarter on quarter. The industry has however, seen demand for diesel go up only by 1 per cent owing to slowdown in economic activities.
To garner more footfalls at its fuel retail outlets, RIL plans to leverage technology to provide superior customer value across the network. It would also go for an aggressive automation based instant reward schemes providing an edge over the competition which lacks nationwide automation, it said. Among the private players, RIL has one of the largest network with state-of-the-art infrastructure.
In May 2008, RIL had closed its fuel pumps owing to mounting losses, as it was selling fuel at rates much higher than the subsidized prices of state-owned oil companies.
RIL also proposes to give unique value added services through fleet management program to help customers with fleet control, cash flow management, cashless transactions and information. Customized loyalty program targeting different customer segments would also be launched.
"RIL and Essar are getting aggressive in the fuel retail segment post diesel deregulation. So far there has been a shift of 0.2-0.3 per cent from the market share of state-run oil marketing companies," said a senior official from Indian Oil Corporation.
Last month, to attract footfalls at its retail outlets, RIL began offering discounts to customers at its retail outlets.
According to retailers and dealers, RIL offers a discount of Rs 5 on petrol worth Rs 300 and Rs 10 on diesel of Rs 1,000. For diesel worth Rs 12,000, the discount is Rs 225. An RIL executive confirmed this."Post deregulation, our business has picked up pace but we have to provide discounts if we need to attract more customers. There is a misconception among customers that RIL outlets charge more for fuel. We have to dispel these notions if we need business," an RIL dealer from Gujarat had said last month.
According to dealers, bulk buyers and transporters who facilitate transporting of fuel to remote locations find these discounts attractive.
While a few company-owned pumps have already begun dispensing fuel, around 150 dealer-owned, dealer-operated; or company-owned, dealer-operated outlets will be re-opened at a later stage. At company-owned, dealer-operated outlets, RIL takes care of the cost on account of services.
RIL has been battling commission related issues with its dealers. Many of its dealers have been demanding higher commission from the company having declined to re-open their outlets.
A few other dealers, however, have agreed to re-open their outlets. "Some dealers are claiming losses for non-operation of their retail outlets for the past four years. They do not plan to re-open the outlets till they are reimbursed. However, others have softened their stand and plan to begin operations at their outlets," said an RIL dealer.
Dealers say they have invested between Rs 2 crore and Rs 4 crore in each outlet. Depending on the location, the cost of land is between Rs 1.5 crore and Rs 3 crore, with another Rs 30 lakh to Rs 1 crore thrown in for maintaining services at the outlets.
RIL, dealers said, has communicated to them that it will revise their commissions after re-starting of the retail outlets.
Source: B.S
RIL, has re-opened 230 outlets since the diesel de-regulation on October 18,2014. It has 1,400 fuel retail outlets across the country. At present, RIL's fuel retail market share is less than 0.5 per cent.
In its presentation to analysts post its third quarter results last week, RIL said "It is launching aggressive consumer schemes for quick ramp up of volumes and targeting to replicate 2006 performance levels." RIL posted a drop of 4.5 per cent in consolidated net profit at Rs 5,256 crore for the quarter ended December 2014.
In the presentation, RIL said it has seen diesel demand at its outlets go up 11 per cent quarter on quarter. The industry has however, seen demand for diesel go up only by 1 per cent owing to slowdown in economic activities.
To garner more footfalls at its fuel retail outlets, RIL plans to leverage technology to provide superior customer value across the network. It would also go for an aggressive automation based instant reward schemes providing an edge over the competition which lacks nationwide automation, it said. Among the private players, RIL has one of the largest network with state-of-the-art infrastructure.
In May 2008, RIL had closed its fuel pumps owing to mounting losses, as it was selling fuel at rates much higher than the subsidized prices of state-owned oil companies.
RIL also proposes to give unique value added services through fleet management program to help customers with fleet control, cash flow management, cashless transactions and information. Customized loyalty program targeting different customer segments would also be launched.
"RIL and Essar are getting aggressive in the fuel retail segment post diesel deregulation. So far there has been a shift of 0.2-0.3 per cent from the market share of state-run oil marketing companies," said a senior official from Indian Oil Corporation.
Last month, to attract footfalls at its retail outlets, RIL began offering discounts to customers at its retail outlets.
According to retailers and dealers, RIL offers a discount of Rs 5 on petrol worth Rs 300 and Rs 10 on diesel of Rs 1,000. For diesel worth Rs 12,000, the discount is Rs 225. An RIL executive confirmed this."Post deregulation, our business has picked up pace but we have to provide discounts if we need to attract more customers. There is a misconception among customers that RIL outlets charge more for fuel. We have to dispel these notions if we need business," an RIL dealer from Gujarat had said last month.
According to dealers, bulk buyers and transporters who facilitate transporting of fuel to remote locations find these discounts attractive.
While a few company-owned pumps have already begun dispensing fuel, around 150 dealer-owned, dealer-operated; or company-owned, dealer-operated outlets will be re-opened at a later stage. At company-owned, dealer-operated outlets, RIL takes care of the cost on account of services.
RIL has been battling commission related issues with its dealers. Many of its dealers have been demanding higher commission from the company having declined to re-open their outlets.
A few other dealers, however, have agreed to re-open their outlets. "Some dealers are claiming losses for non-operation of their retail outlets for the past four years. They do not plan to re-open the outlets till they are reimbursed. However, others have softened their stand and plan to begin operations at their outlets," said an RIL dealer.
Dealers say they have invested between Rs 2 crore and Rs 4 crore in each outlet. Depending on the location, the cost of land is between Rs 1.5 crore and Rs 3 crore, with another Rs 30 lakh to Rs 1 crore thrown in for maintaining services at the outlets.
RIL, dealers said, has communicated to them that it will revise their commissions after re-starting of the retail outlets.
Source: B.S
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