Haldia Petrochemical Ltd (HPL), once on the verge of being declared ‘sick’, has seen a turnaround like none other in the past one year. And now the country’s second largest petrochemical facility is gearing up for opening fuel retails stores across West Bengal.
Top sources in the government say that the oil ministry has cleared HPL’s proposal to set up 50 retail outlets in four districts of West Bengal.
As per current policy, the government grants retailing license to companies that promise to invest at least Rs 2000 crore in exploration, production, refining or in terminals. HPL qualifies in this rule.
“In the second phase of its expansion of retail fuel outlets, HPL will open 50 more shops in West Bengal,” said a source in the know of the matter. The source did not wish to be named. He added that entry of more private companies in the fuel retailing space would increase competition and in tuen benefit customers.
Formed as a joint venture between the West Bengal government, The Chatterjee Group (TCG), Tata Group and Indian Oil Corporation in 1994, HPL went down the spiral of bad debt, battle for control, eroded net worth and cash crunch till it stopped production a few years back. But help from the central government, a loan from SBI and a change of control in December 2015, wherein TCG came to control the majority stake in HPL has seen fortunes of the company change.
Ever since the de-regulation of petrol and diesel prices, speculation has been high about private companies entering the market, but a global crude price slide has put brakes on the plan. From $115 a barrel in mid-2014, crude relentlessly fell to below $30 in January 2016.
Reliance and Essar Oil Limited, the only other private refiners in India, had together a share of 17% of the domestic retail market for diesel and 10% for petrol by 2006, before, competition from public sector companies halted their progress. After the de-regulation Shell has also shown keenness in expanding its retail network.