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Essar Oil stops discount on branded petrol

November 04, 2004 10:53 IST

Essar Oil, the first private sector oil marketing company, has withdrawn its introductory discount on its branded petrol Punch.

In less than five months, the company has priced its fuel on a par with the ordinary petrol marketed by public sector oil companies in the country.

Essar Oil is also launching its branded diesel 'DDX' having 56 C-tane specifications across all its outlets in the country. Recently, the company decided against selling ordinary fuel and moved towards offering the premium petrol such as Punch.

Indian Oil Corporation sells premium petrol and diesel under the 'Xtra Premium' and 'Xtramile' brands, respectively. Hindustan Petroleum Corporation hawks a premium motor spirit called 'Power' and diesel with additives called 'Turbo Jet'. Bharat Petroleum Corporation sells premium petrol and diesel called 'Speed'.

Industry sources claim that Essar Oil has established its brand and has now decided to withdraw discounts to dealers and customers. They point out that the company, which was offering discount to select dealers depending upon locations, has also been forced to change the pricing owing to high volatility in crude oil and petroleum products prices.

An Essar Oil spokesperson said: "Essar Oil sells petrol of higher octane content (under brand name Punch) and diesel of higher C-tane content (under brand name DDX) equivalent to branded quality fuel sold by other oil companies at the normal price of unleaded fuel thereby providing value for our customer."

With over 150 petrol bunks in the country, Essar Oil's strategy of selling premium fuel at a discount or at par "does not dent the fortunes of the oil PSUs", say industry sources.

The four oil marketing PSUs, IOC, HPCL, BPCL and IBP, collectively have over 23,000 retail outlets across the country.

Sources close to Essar Oil, however, indicate that the company was selling branded fuel at Rs 1.33 a litre lower than those branded petrol offered by PSU oil companies.

Meanwhile, Essar has commissioned 154 retail outlets -- over 85 in the western region, over 40 in the northern region and over 9 petrol bunks in the south.

Besides Essar Oil, Reliance Industries has also embarked on an ambitious plan of setting up 5,849 retail outlets.

The country's largest private sector company, Reliance Industries, has already commissioned over 200 outlets and 600 retail outlets were under various stages of construction.

Anil Ambani, vice-chairman and managing director of Reliance Industries, had pointed out that the company will have at least 2,000 petrol stations by next year.
Hemangi Balse in Mumbai