New Delhi: Bharat Petroleum Corporation Limited (BPCL) is planning to expand its fuel retail network by 14,273 pumps or nearly two-thirds to enhance its share in the rapidly growing domestic fuel market.
The company, which operates a quarter of the country’s petrol pumps, has reported a profit of ₹19,052 crore for the April-September period, a half-yearly record for the company. It is pressing ahead with fuel network expansion as the demand for petrol and diesel continues to grow on new vehicle sales and expanding economy. National consumption of both diesel and petrol has grown 6% this financial year.
“We have recently issued an advertisement for 14,273 new retail outlets spread across the country for capturing more market and increasing our presence,” said VRK Gupta, director (finance) at BPCL.
Advertising only shows the intention of the company and the actual buildout will depend on dealers’ interest and the commercial viability of the sites.
India‘s fuel retail network has grown by nearly 40% to about 88,000 pumps in the past five years, driven mainly by aggressive expansion by state-run companies as private players have remained cautious. Indian Oil Corporation alone operates about 36,700 pumps, or about 42% of the total. BPCL and HPCL operate a similar number of pumps, around 21,300. BPCL, however, sells more diesel and petrol on average from its pumps than HPCL.
BPCL’s bumper profit this year has been driven by a mix of cheaper Russian crude oil, higher refining margins and a freeze on domestic pump prices. The company’s increased capacity to process cheaper crude and the flexibility to make big switches between different products have helped boost refining margins. Russian crude comprised about 30-40% of the total crude it processed in the second quarter.
Increased profits have helped cut borrowings at state refiners.
BPCL’s gross borrowings have fallen by ₹5,000 crore sequentially to ₹22,500 crore. Borrowings will rise over the next few years when capital expenditure expands significantly. It plans to spend ₹150,000 crore in five years. This year, it plans to spend ₹10,000 crore. A third of the ₹150,000 crore capex will go into adding refining and petrochemicals capacity. About ₹26,000 crore each will go into upstream, city gas and marketing infrastructure.