"BPCL to Invest ₹2,500 Crore in Expanding City Gas Distribution Networks in FY25"

State-run Bharat Petroleum Corporation (BPCL) announced recently that it will invest ₹2,500 crore in the current fiscal year, ending March 2025, to expand its city gas distribution (CGD) network.

BPCL, India's second-largest state-controlled oil marketing company, holds authorization to establish CGD networks across 26 geographical areas (GAs), of which 25 are already operational.

"To support India’s ambition to become a gas-based economy, BPCL invested ₹1,920 crore last year and plans an additional ₹2,500 crore this year, focusing on expanding the CGD network," BPCL Chairman and Managing Director G Krishnakumar said during the company’s annual general meeting.

Alongside its joint venture companies, BPCL has authorization for 52 GAs covering 154 districts. In FY24, the company's gas business supplied 1,857 thousand tonnes (TT) of gas, with 726,000 tonnes consumed internally by BPCL refineries and the remainder sold to various market customers. The CGD network experienced significant growth, with sales doubling to 83,000 tonnes, Krishnakumar reported.

BPCL is actively developing a comprehensive gas ecosystem across its value chain, involving strategic sourcing, partnerships, and collaboration on import terminals and regasification facilities. The company is also securing gas transport agreements in major pipelines and expanding its CGD networks to meet the rising gas demand from domestic, retail, commercial, and industrial customers.

Krishnakumar highlighted that factors such as a favorable demographic dividend, urbanization, growth in automobile sales, and infrastructure development are driving an increase in domestic consumption. BPCL's market sales grew by 4.3% year-on-year, and its market share among public sector oil marketing companies (OMCs) rose to 27.57%, solidifying its position as the second-largest PSU OMC.

In its retail business, BPCL achieved a 1.1% year-on-year growth, reaching a volume of 32.69 million tonnes (MT) in FY24, while PSU OMCs collectively experienced a 2% decline. Petrol sales increased by 5.4% year-on-year, reaching 10.09 MT, while BPCL’s diesel sales, although impacted by an industry-wide decline, showed resilience with only a 1.6% drop compared to the overall 5.5% decrease.

BPCL significantly expanded its retail network by adding around 800 new outlets during the year, bringing its total number of outlets to over 22,000. To capitalize on the growing demand in emerging markets and along new expressways, BPCL plans to add 4,000 new outlets in the next five years, Krishnakumar stated.

HBL