Though Mukesh Ambani-led Reliance Industries Limited has announced its plans to open its defunct fuel retail outlets in the country, the dealerships in Uttar Pradesh feel their fate still hangs in balance.
Most dealers maintained that they had not heard from the company on the issue. "There has been no communication from RIL on the issue and whenever we try to call them, company officials only say there is some file movement," said a dealer in central Uttar Pradesh. They rued that their investment in land and equipment was lying tied down without any return.
RIL had closed its outlets in May 2008 due to mounting losses as it was selling fuel much above the subsidised retail prices of state-owned oil companies.
The petrol and diesel at Reliance outlets were costlier by almost Rs 10 and Rs 6 respectively as against public sector retailers such as Indian Oil Corporation and Bharat Petroleum. This was the time when international crude oil prices were hovering around $150 per barrel.
Now, since the crude oil prices have softened considerably due to recession in the international market, RIL is mulling reviving its fuel retail business.
"In this changed scenario of fuel prices, we are exploring all the possibilities and looking at all the options before us," a RIL spokesperson said.
RIL has about 800 outlets across India, some company-owned and some owned by the dealers. There are reports that the company might rope in some public sector oil company or a multinational to run these outlets.
The spokesperson also also the company had already informed the dealers about their plans to revive the outlets. "We are clear that we will not exit the fuel retail business or convert these outlets into any other format," he underlined without putting any time frame to it.
Meanwhile, some dealers in UP have sold the outlets to the company, since they were incurring huge losses on the blocked investment.
"Selling the outlet to the company is a losing proposition, but some were forced by their bleak financial position to repay their debt, rather than await an uncertain future and incur further losses," another dealer in eastern UP said.
There are about 110 Reliance fuel outlets in the state, of which over 35 are company owned.
