Indian Oil Corporation (IOC), the nation's biggest oil firm, on Friday said it will partner with Malaysia's Petronas for natural gas and transportation fuel retailing business.
IOC and Petronas have a 50:50 joint venture, IndianOil Petronas Pvt Ltd (IPPL) for import of LPG. It sells LPG to commercial customers who are not allowed to use subsidised cooking gas sold to households by state energy firms.
This joint venture will "diversify into natural gas and transportation fuel retailing business," IOC Chairman Shrikant Madhav Vaidya said.
IPPL will set up petrol pumps as well as get into the city gas distribution business, he said.
He however said detailing of the business has not been done yet.
IOC owns 32,303 out of 77,709 petrol pumps in the country. It also has licences to retail CNG to automobiles and piped cooking gas to households in several geographical areas.
Vaidya said IPPL will have its own branding and marketing.
Asked if IPPL's foray in retailing will not cannibalise on IOC's business, he said India's energy demand is growing and will have space for all players.
"Energy pie is increasing. There is place for everybody," he said. "Our (IOC's) market share is intact and IPPL will capture new opportunities." Vaidya said the detail of IPPL's foray will be finalised in due course.
"Today the board of IOC has approved amending the memorandum of association of IPPL for forays into natural gas and transportation fuel business," he said.
IPPL will be the 7th fuel retailer in the country. Besides IOC, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) are the other two public sector fuel retailers.
Reliance Industries and BP have a joint venture, Reliance BP Mobility Ltd which operates 1,422 petrol pumps in the country. Rosneft-promoted Nayara Energy is the biggest private player with 6,152 petrol pumps while Shell has 270 outlets.
BPCL owns 18,766 petrol pumps while HPCL has 18,776. Mangalore Refinery and Petrochemicals Ltd (MRPL) has some 20 outlets.
IPPL has import terminals at Haldia in West Bengal and Ennore in Tamil Nadu. It is also one of the leading parallel marketers of propane/ butane / LPG in India.
Vaidya said monetisation of retail business in the future may be on lines of IPPL.
