Mukesh Ambani-owned Reliance Industries [Get Quote] Limited, which closed down fuel pumps in UP last month due to mounting losses, has denied plans of converting the defunct outlets into malls. The company was forced to shut the outlets as the petrol and diesel sold there were costlier by nearly Rs 10 and Rs 6, respectively, vis-a-vis public sector retailers.

Now, even as the recent fuel price hike provided some respite to public sector oil marketing companies, the defunct Reliance fuel retail dealerships in Uttar Pradesh - akin to their counterparts in other states - are unsure of their fate.

A Reliance dealer told Business Standard that the company had not intimated them about the future course of action. "We face an uncertain future on our investments and there is no word from RIL."

On May 12, RIL officials held a meeting with its dealers in Lucknow to seek their suggestions and listen to their grievances following the abrupt closure. Later, such meetings were also held in some other UP towns like Varanasi and Allahabad.

Another dealer rued that their investment in the region of Rs 4-5 crore (Rs 40-50 million) was lying locked up in the outlets with no positive signs still from RIL. Several of the dealers had taken loans to invest in the venture and now the source of revenue has gone with the suspension of operations.

There were also reports that RIL planned to convert its fuel retail outlets into malls and multiplexes. However, a company spokesperson denied any such move by the company. "It is only speculation and we do not plan to convert the dealerships into malls."

There are about 115 Reliance fuel retail outlets in UP of which almost 35 are company-owned and the rest are owned and operated by dealers.

"We are waiting for the government to create a level playing field for private oil marketing companies, which would be in the interest of the dealers as well as consumers," the spokesperson said.

However, he maintained that during the operation of the fuel outlets, the company had given a good return on capital to its dealers in the last two years, even as substantial losses accrued to RIL. He further informed that some dealerships in the country were still operating since they had oil stocks pending.

RIL wants the subsidy granted to public sector oil companies to be reduced to enable private sector retailers to operate and make profit.