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Pratim Ranjan Bose

Kolkata , May 14

OIL marketing companies are shifting focus to the untapped rural market. The three major oil marketing PSUs in the country — Indian Oil, Bharat Petroleum and Hindustan Petroleum — have prepared blue-prints for setting up over 2,500 branded rural outlets in the current fiscal.

Overall, the companies are setting up 4,167 outlets during the year.

The low opportunity cost in setting up rural outlets is a major catalyst for the oil PSUs. Against a cost of Rs 25-30 lakh to set up outlets in semi-urban areas, rural outlets cost Rs 5-12 lakh.

Indian Oil and Bharat Petroleum have drawn up the biggest-ever rural network expansion plans.

Indian Oil, which owns 20-odd Kisan Seva pumps, plans to add 1,000 rural outlets this year. Overall, the company will expand the network by 1,512 retail outlets. The company plans to set up 3,000 Kisan Seva pumps in the next few years.

Apart from diesel, these pumps will also market LPG, which is facing growing demand in the rural sector.

To promote non-fuel business, each pump will have a shopping mall — Kisan Seva Kendra — offering a wide range of products including seeds, fertilisers, pesticides, consumables and banking facilities. IOC has tied up with ICICI Bank for providing banking facilities at these outlets. The average cost of each pump is pegged at Rs 5 lakh.

BPCL is targeting 1,735 fuel stations at a cost of over Rs 150 crore during the current year. Of these, 1,000 outlets will be set up in the rural areas.

Having launched its rural campaign with 400 outlets last year, Hindustan Petroleum Corporation Ltd plans to set up another 500 Hamara pumps in the rural sector during 2005-06. The company plans to expand its retail network by 920 fuel stations. Unlike IOC, HPCL is not focussing on any fixed model for rural outlets. However, non-fuel business will be an integral part of such pumps. While marketing of agri-inputs is a priority area, the company is giving a free hand to its franchisee operators to exploit whatever business opportunities that present themselves in the non-fuel segment.

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