India's fuel retail network has reached a significant milestone with the country's petrol pump network touching an important landmark. According to a recent report, the number of petrol pumps in the country has crossed the 1 lakh mark, nearly doubling in the past decade. This expansion has primarily occurred due to aggressive expansion by state-owned oil companies to meet the growing demand for vehicles and make fuel easily accessible in rural and remote areas, news agencies reported.
Indian fuel retail boom
This vast network has now placed India third globally in fuel retail. Only America and China have more petrol pumps, though both countries have much larger geographical areas compared to India. According to former Indian Oil Corporation Chairman B Ashok, this rapid expansion has largely resolved fuel problems in rural and remote areas. Improved competition has also enhanced service quality.
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According to the report, currently about 29% of total petrol pumps are located in rural areas, whereas a decade ago this rate was 22%. Not only that, services are not limited to petrol and diesel alone. About one-third of pumps now have alternative facilities like compressed natural gas (CNG) or electric vehicle charging, indicating fuel diversification.
However, despite policy reforms, private sector participation remains limited. Less than 10% of the country's total petrol pumps are in private hands. Reliance Industries has about 2,100 outlets and Nayara Energy has about 6,900 outlets. Industry experts believe that private companies are not showing enthusiasm for investment due to continued government control over fuel retail prices.
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While demand for petrol and diesel is increasing, questions remain about how justified investment in petrol pump expansion will be. In the past decade, petrol consumption has increased by 110% and diesel by 32%. Overall, total fuel usage has increased by about 50%. All India Petroleum Dealers Association Treasurer Nitin Goyal says that many pumps outside cities are struggling to survive financially. Industry circles believe that future expansion of this network may stall and increasing alternative fuel services could become the new revenue path for pumps.
