‘Deregulation will result in more choice for consumers’ | business | Hindustan Times
Today in New Delhi, India
Dec 15, 2017-Friday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

‘Deregulation will result in more choice for consumers’

From being the director, business development, at Indian Oil Corporation, Naresh Nayyar moved on as the first chief executive officer of London-based ONGC-Mittal Energy Ltd, before joining Essar Oil Ltd. As its CEO and MD, Nayyar has been instrumental in taking some key decisions, including Essar’s plans to pursue acquisition of Shell’s refineries in Europe. He spoke to Anupama Airy on the group’s plans.

business Updated: Feb 22, 2010 22:17 IST

From being the director, business development, at Indian Oil Corporation, Naresh Nayyar moved on as the first chief executive officer of London-based ONGC-Mittal Energy Ltd, before joining Essar Oil Ltd. As its CEO and MD, Nayyar has been instrumental in taking some key decisions, including Essar’s plans to pursue acquisition of Shell’s refineries in Europe. He spoke to Anupama Airy on the group’s plans. Excerpts

The government’s move to free fuel prices will help private fuel retailers come back into business. How do you view this?

Deregulation of the oil sector is long overdue and a free market for auto and other fuels will lead to higher levels of competition. It will also result in more choice for the consumer, better service levels, competitive prices and improved quality of products.

What is your strategy behind doubling your petrol pumps, especially when private fuel retailers are losing money?

The oil industry has always been a regulated market when it comes to retail operations. The lack of a level-playing field for private players has made their existence difficult. Expansion of retail network is an ongoing process for Essar Oil, because this is a long-term strategy for us. Essar’s innovative style of operations has helped it to stay operational in these tough times. With deregulation, Essar envisages a more competitive retail oil marketing environment.

How sustainable will be the business if only petrol is freed and diesel is not?

Petrol constitutes around 20 per cent of the retail fuel requirement. Freeing petrol prices will be a step towards deregulation and we will welcome it on a positive note.

Despite a fall in refining margins globally, Essar Oil continues to be on a major expansion drive. How do you explain this?

Refining is a cyclical business, and we expect a strengthening of refining margins by the time our expanded capacities get commissioned. Our expansion strategies in India are long-term moves and are hinged on strong domestic fundamentals. We also remain on the look-out for refinery acquisition opportunities with sound market fundamentals.

What kind of refining capacities do you want to set up?

Our plan is to expand our existing refinery at Vadinar to 36 million tonnes per annum in two phases.