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Haldia Petchem looks at fuel retailing after financial turnaround
NEW DELHI: Haldia Petrochemical Ltd (HPL), once on the verge of being declared a “sick” company has turned around in the past one year. And now the country’s second
NEW DELHI: Haldia Petrochemical Ltd (HPL), once on the verge of being declared a “sick” company has turned around in the past one year. And now the country’s second largest petrochemical facility is gearing up for opening fuel retails stores across Bengal.
Top sources in the government said that the oil ministry has cleared HPL’s proposal to set up 50 retail outlets in four districts of Bengal.
As per current policy, the government grants retailing license to companies that promise to invest at least ₹2,000 crore in exploration, production, refining or in terminals. HPL qualifies in this rule.
HPL is expecting to post a three-fold rise in revenues in 2015-16 to ₹10,000 crore.
“In the second phase of its expansion of retail fuel outlets, HPL will open 50 more shops in Bengal,” said a source in the know of the matter.
He added that entry of more private companies in the fuel retailing space would increase competition and in tune benefit customers.
Formed as a joint venture between the 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 halted production in 2012.
But help from the central government, a loan from State Bank of India and a change in management 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 retail fuel 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, together had a 17% share 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.
