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Shell to retail fuel in India by year-end

Rediff: Shell to retail fuel by year-end

“Anglo-Dutch oil giant Shell will begin auto fuel retailing in India by the end of 2004”

August 16, 2004 14:28 IST

Anglo-Dutch oil giant Shell will begin auto fuel retailing in India by the end of 2004, Shell India Chairman Vikram Singh Mehta said in New Delhi.

Shell has a licence to set up 2000 petrol stations in the country and plans to set up the pumps in phases.

“We will begin rolling out petrol stations from the fourth quarter of 2004 and our first set of retail outlets will be on ground by 2004-end,” Mehta said.

The company is planning 200-250 petrol stations in the first phase but Mehta did not say how many outlets will be selling petrol and diesel by the year-end.

“It depends on an array of things. Market, supply source and logistics will have to be put in place,” he said.

Shell India, he said, received the formal approval of the government to begin petrol and diesel retailing this month.

Earlier, the firm was permitted to set up petrol stations but was not authorised to begin selling until it completed the Rs 2,000 crore (Rs 20 billion) investment in oil infrastructure, a pre-requisite for a retail licence in India.

“We have invested more than Rs 2,000 crore in setting up an LNG import and regasification terminal at Hazira in Gujarat and have since been permitted to begin fuel retailing,” Mehta said.

Shell has agreements with Hindustan Petroleum Corp Ltd and Mangalore Refinery and Petrochemicals Ltd for sourcing of fuel. “We have an option to import but we clearly prefer to source petrol and diesel from domestic refineries,” he said.

Mehta ruled out picking equity in the upcoming refineries at Bina in Madhya Pradesh, Paradeep in Orissa and Bathinda in Punjab and said there was still scope for new petrol stations.

India already has over 22,000 petrol stations, the highest in the world, and more firms like Reliance Industries Ltd, Essar Oil, Oil and Natural Gas Corp, MPRL and Numaligarh Refinery Ltd, were also granted retail licences after the deregulation of the sector in 2002.

“We would not be setting up retail outlets if we felt there was no market for us. Ultimately, the quality of fuel, service and reliability of supply will determine the sales,” he said.

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