IndianOil records 8.9% retail growth
New Delhi   02-May-2008
The economy may be showing signs of a slowdown but diesel consumption, considered one of the indicators of growth, is surging on the back of rising demand from the housing construction industry and increased use of private generators. And true to its leadership status, flagship refiner-retailer IndianOil marketing wing has cashed in by raising its overall market share to 48.9% through an impressive 8.7% year-on-year growth in sales volume till March 31. Ironically though, with daily losses on fuel sales estimated at Rs 238 crore, a sizzling marketing performance means higher losses because the company has to retail fuels at an artificially low price set by the government. No wonder, while discussing a higher borrowing limit of Rs 80,000 crore at Tuesday's board meeting, the company's independent directors expressed anguish that the situation could make the company run out of cash and asked the full-time directors to take up the issue with the government. Indications are that IndianOil could end 2008-09 by taking a hit of Rs 10,000 crore on its books if the government keeps pump prices suppressed and international crude keeps rising. "IndianOil’s market leadership has come from its expanded reach, innovations and consumers' increased awareness of quality and quest for better products. XtraPremium petrol is available in 38% of our outlets and XtraMile diesel in 58%. We are selling auto-LPG through 157 outlets across 75 cities and will be adding 100 more stations this year we have also benefited from successful amalgamation of IBP's business," IndianOil director (marketing) G C Daga said. IndianOil had acquired IBE a standalone retailer, during the NDA regime's disinvestments drive. On the ground, IndianOil’s marketing performance was top-notch in the industry in all fuel segments. Overall domestic sales stood at 58.3 million tones, while exports stood at 3.3 million tones. This marks a growth rate of 8.7% and 8.5%, respectively Similarly in branded motor fuels, which are costlier than normal fuels; IndianOil’s market share grew to 48.2% in petrol and 58.6% in diesel. In volume terms, growth stood at 89% for petrol and 65% for diesel in auto-LPG too volumes grew 53%, with an average monthly sale of 8,000 tones. Daga said the increased thrust on rural markets through the string of 'Kisan Seva Kendras' too had yielded results. The number of these low-cost retail outlets has crossed 2,500 and cover 85% of the districts and 42 % tehsils in India.