IndianOil starts integration of marketing unit in NE
Kolkata   17-Apr-2008
IndianOil has unbeaten integration and rationalization of the parallel setups fits marketing division and Assam oil division (AOD) in the northeastern states from this it month onwards. IndianOil has unbeaten integration and rationalization of the parallel setups fits marketing division and Assam oil division (AOD) in the northeastern states from this it month onwards. in a statement sent to ET said this is being done to enhance operational synergy, bring down costs and emerge as the least cost supplier for the benefit of millions of its customers so as to maintain its leadership position. "The integration Will in no way affect AOp's status and the treasured 'Rhino’will continue to retain its proud place both in thought and deeds," it stated. Assam chief minister Tarun Gogoi had moved petroleum minister Murli Deora opposing the integration of the AOD. The chief minister had asked Mr Deora to ensure that the autonomy of the AOD is maintained and the company's emblem, the charging one horn Rhino, is also kept intact The IndianOil statement further said it was way back in October 1981 that the erstwhile Assam Oil Company was merged with Indian Oil and a separate division by the name of AOD was formed with its headquarters at Digboi. Since then, both AOD and Indian Oil's marketing division were operating in the northeaster states as independent entities with their own networks of petrol/diesel dealers, Indane(LPG) distributors, and other administrative offices. Both the divisions had independent officers for managing the sales areas and were, in a way, competing with each other. However, the dismantling of the administered pricing mechanism in the petroleum sector in 2002 brought with it competition from new players. In a scenario of increasing competition, spiraling crude oil prices and the resultant under-recoveries suffered on major products, Indian Oil took a number of initiatives to optimize costs and rationalise resources. The advent of private players and the setting up of refining and marketing infrastructure by other PSUs in the northeastern states necessitated integration and rationalization of Indian Oil's activities in a high-cost sector with tough logistics to remain competitive, it argued. The statement added that the marketing operations of AOD and Indian Oil's marketing division in the northeastern states have been integrated with effect from April 1,2008. Indian Oil will now be able to remove duplication of cost and efforts, thereby enabling upgrade of all its petrol/diesel stations (retail outlets) with the objective of providing better and more efficient services to the people of Assam and other states in the North East. The statement said IndianOil has done its best to upgrade and modernize the century-old Digboi refinery and all other establishments of AOD.' This is borne out by the fact that though the capacity of the refinery is only 0.65 million tonne per annum, it can be compared with any other modern refinery in India. This could be achieved by continuous investments in upgrade of existing facilities and setting up of new units at the refinery.