Shell is closing 15 of its retail outlets in south India from Wednesday, in the absence of any assistance for private oil companies in the face of rising global crude oil and product prices, the company said on Monday.

These outlets are located in not so easily accessible areas. Four are in Karnataka, seven in Tamil Nadu, two each in Andhra Pradesh and Gujarat. The company said it would re-open these outlets when market conditions turn favourable.

Surinderdeep Singh, MD and retail general manager, Shell India Marketing, said, the company remains committed to consolidating its retail business in the rest of the country.

We are excited about the growth prospects here. However, the absence of a level playing field and the high cost of servicing retail outlets spread across geographically diverse areas have left us no choice but to consolidate our network wherever there are supporting sites near our customers, to minimise the inconvenience to them," Singh said in a statement.

Shell India has 50 outlets in India, most of them in south India and Maharashtra.

A company spokesperson said, "Shell entered the Indian market with a retail plan thinking that the government would disband the selective subsidy regime as recommended by the Rangarajan Committee in 2002, but this is still to be done. We believe that the government will have a fair policy for all."

Shell filed a petition with the oil regulator in March this year, together with two other private players, Reliance [Get Quote] and Essar, seeking to set right these anomalies in the oil sector.

In an interview to Business Standard recently, Singh had said that while the government was subsidising public sector companies through oil bonds, the private sector was left with the burden of sustaining losses due to rising oil prices in the international market. "We are unable to sell petrol and diesel at the prices offered by the public sector companies," he had said.

He said Shell was making a loss of Rs 5-6 a litre on motor spirit and Rs 7-8 a litre on diesel.

"We have written a letter to the petroleum regulator to ensure a level playing field for both public and private sector companies, so that we can come out of losses and supply fuel on a par with public oil companies," Singh said.

Unable to bear any more losses, Shell stopped selling main grid fuels some time ago, while continuing to sell premium fuel.

Shell India got a licence to set up a network of up to 2,000 fuel retail stations in India in July 2004. One of the conditions was that 11 per cent of the outlets would be located in remote areas. The company has invested $1 billion (about Rs 4,000 crore) in India till today and plans to open another 100 outlets within a year.