Reliance Industries (RIL) is going to induct a partner into a planned new venture for its loss-making fuel retail business. State-owned Indian Oil Corporation (IOC) and the Indian unit of Anglo-Dutch Royal Dutch Shell are the front runners.
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The RIL operates the worlds largest refining complex at Jamnagar in Gujarat. There were speculations that Reliance may exit the business altogether but now it has no plans to completely exit fuel retailing in the country.
Reliances fuel retail business was making losses so it was forced to shut operations last year when galloping crude oil prices made it unviable to compete against PSU retailers. While cost shot up the Reliance couldnt compete with PSU fuel retailers who sold fuel at government dictated lower prices to contain inflation in the economy. Now RIL is keen to recoup some of its past losses, estimated to be several thousands of crores.
The group has recently invited bids from a raft of Indian and overseas companies, notably IOC, Shell India, BPCL and HPCL.
RIL has invested nearly $1400 million to date in the fuel retailing business and has built up a network of 1,432 petrol pumps across the country. Most of these outlets are located on the lucrative Golden Quadrilateral road network on the countrys East-West corridor, where fuel sales are higher. Besides the pumps these also have significant land banks which were meant to house hotels, food courts and other commercially exploitable facilities.
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