IndianOil increases market share in branded fuel segment
New Delhi   26-Mar-2009
In a year when sales of brand-led auto fuel are on a sharp decline, IndianOil, the market leader, has been able to augment its market share in all the three categories-petrol, diesel and auto LPG. However, the other two companies, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) have lost share in at least one of the branded segment. IndianOil has gained market share in branded petrol and diesel (see chart) in the current fiscal In auto LPG too, its share has moved up from 45.1 per cent to 48.1 per cent. Mr. G C Daga, IndianOil's director (Marketing) attributes the rise in market share to the aggressive pricing strategy and communication to the consumers about the advantages of premium fuel. "In auto LPG, we have increased the number of stations," he added. BPCL has lost market share in both petrol (from 33 per cent to 28.5 per cent) and auto LPG (from 33.7 per cent to 29.5 per cent). HPCL, while losing share in branded diesel, has gained marginally in petrol (from 21.5 per cent to 23 per cent) and in auto LPG (from 21.2 per cent to 22.5 per cent). Branded petrol accounts for 20 per cent of total petrol sales, while branded diesel accounts for 12 per cent. "Sales have been coming down for all the industry players. This is directly related to the price gap between branded and non-branded fuel. This gap went up to as high as Rs 4 a liter when the basic fuel price was rising. Now1 that the gap is down to around Rs 2 level and price has stabilised, demand should pick up," said an official at HPCL However, branded fuel sales volume is on a decline. Sale of branded petrol is down by 5 per cent in the current year, while branded diesel has declined by nearly 13 per cent. Regular (non-branded fuel sates have also slowed but are still showing healthy growth of 8 per cent to 9 per cent. Branded fuels are sold at a marginal premium to regular fuels and they are beyond price control. Besides the general slowdown in demand, sales have fallen this year due to higher excise duty, which had increased the price gap between branded and unbranded fuels. In June 2008, the government reduced the excise duty on non-branded diesel and petrol by Re 1 a litre while keeping it unchanged for branded products.