Lesser margins `dampener`: Shell

Mumbai: To set up three fuel station in Gujarat.

Shell India Marketing Pvt Ltd (SIMPL), which has entered Gujarat, its fifth state in the country says that while low margins in the fuel retail industry are a dampener to a faster growth, they are not a constraint.

Company officials also revealed that they had approached the government to create a level playing field for private fuel retailers and believe that just as in the telecom and banking sector, deregulation of the fuel industry would happen eventually.

The company sources all its fuel requirements from the domestic market. On being asked if sourcing Euro 2 and Euro 3 fuels would be an area of concern given that most other private players are either using it for their own domestic retail operations or exporting them, Surinderdeep Singh, managing director and retail general manager SIMPL said they are hopeful that when IOC and other domestic players upgrade their refining capacity more and more, Euro 2 and Euro 3 fuels would be available for standalone players like Shell.

He added that in addition to the four-year product supply agreement signed with the Mangalore Refinery and Petrochemicals Ltd (MRPL) for sourcing products including all grades of MS (motor spirit) and HSD (high-speed diesel), the company is in talks with its local partners for possible sourcing.

Presently, Shell’s outlets stock petrol, premium petrol and diesel. Singh said that Shell global has been looking at alternative fuels and is testing hydrogen presently. “After offering petrol and diesel, the logical next step would be LPG and/or CNG which we are looking at after a year or two,” added Singh.

Shell has announced three retail fuel stations in Gujarat; one each in Ahmedabad, Vadodara and Rajkot. It has secured a number of properties in the state and and is looking at Surat, Jamnagar and other cities for further expansion in the state.

With this, the total number of Shell fuel stations in India has gone up to 42. The entry into Gujarat has also marked its presence in North Western India.

The company had entered the auto-fuelling segment after acquiring a marketing licence from the government to set up a network of 2,000 fuel retail stations in India. It had set up its first retail outlet in Bangalore in November 2004 and subsequently entered Chennai, Hyderabad, Pune, with Mumbai being the most recent.