The Hindu : Business : Shell to invest Rs. 250 crores in petrol pumps

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Wednesday, Dec 08, 2004

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Business

Shell to invest Rs. 250 crores in petrol pumps

By Our Staff Reporter

BANGALORE, DEC. 7. Shell India Private Ltd., a wholly owned subsidiary of Royal Dutch Shell Group, will invest Rs. 250 crores in the first phase of starting petrol stations, Vikram Singh Mehta, Chairman of the Shell Group of companies in India, told reporters here on Tuesday.

It may be recalled that in October, Shell announced that it aimed to set up a network of 2,000 petrol stations in the country, for which it had the Central Government approval. After India deregulated its oil sector in April 2002, Shell obtained the licence to build the 2,000 petrol stations. Last week, the company opened its first retail station here. Shell would buy its petrol from Mangalore Refineries and Petrochemicals, Mr. Mehta said.

With Shell's entry, there are three public sector companies and three private sector players in oil retailing, estimated at between Rs. 65,000 crores and Rs. 70,000 crores, and growing at 5 per cent.

"The state run companies today have a 99 per cent share in the market. But, we plan to become a significant player,'' Mr. Mehta said.

Reliance, which had also entered the retail sector, had a petrol station between Bangalore city and Devanahalli where an international airport was to be built. Essar was the other private sector company in the sector, he said.

On Shell India's business strategies, Mr. Mehta said the oil retail sector in India was still a growing market and that "there is still place for private players differentiated from existing players.''

There were no plans to build a refinery in India yet, but the company would look at that option when it became a significant player in the sector in the country, he said. Shell India was looking to sell liquefied natural gas (LNG) to power producers and other industries from its import terminal in Hazira, Gujarat, and liquefied petroleum gas (LPG) from an import terminal in Pipavav.

The Government has not yet delivered on its promise to either lift the subsidies provided to state owned sellers of LPG or give the same break to private sector companies wanting to market the fuel. Domestic consumption accounted for 90 per cent of LPG retail, Mr. Mehta said.

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