RIL will not dismantle petrol pump outlets

Reliance Industries Limited (RIL) has taken a decision not to dismantle its company-owned petrol pump outlets. Instead, RIL will keep them intact to be re-opened whenever it becomes viable to re-enter the retail fuel business again. RIL has offered to buy back the remaining 1,500 petrol pumps which are either dealer-owned and operated or leased from dealers. The company is believed to have offered lucrative deals of between Rs2-4 crore (US$464,306-928,613) for the properties and petrol pumps owned by the dealers. For dealers who did not want to sell out, RIL is assisting in converting them into gas dealerships. RIL was forced to exit the petroleum retail business after notching up losses of almost Rs800 crore (US$185.7 million) last year on investments of around Rs2,500 crore (US$580.4 million) on account of the growing gap between low, government mandated domestic retail prices of petrol and diesel fuel and rising global crude oil prices. Because it is a private sector company, RIL is not entitled to receive fuel subsidies that state-owned enterprises such as Indian Corp. receive from the government in terms of oil bonds. (June 24, 2008)