FU­ELLING GROWTH

India Today - - STATES - —Anilesh S. Ma­ha­jan

GLO­RI­OUS PAST

In 2014, In­dian Oil Cor­po­ra­tion sur­prised ev­ery­one by en­ter­ing the For­tune Global 100 list—the first In­dian com­pany to do so. Those were the days of high oil prices and the state-pro­moted oil mar­ket­ing com­pany broke all bar­ri­ers. In­dian Oil en­joys the coun­try’s largest cus­tomer in­ter­faces, thanks to its net­work of more than 26,500 fuel out­lets with a foot­fall of over 15 mil­lion ev­ery day and sale of 2 mil­lion LPG cylin­ders daily. The com­pany also dom­i­nates the re­fin­ing in­dus­try, own­ing 11 of the 23 re­finer­ies in In­dia and re­fin­ing 80 mil­lion tonnes of crude oil per an­num.

In­dian Oil has its ori­gins in the Nehru­vian era, when Jawa­har­lal Nehru en­vis­aged a role for the pub­lic sec­tor in the re­fin­ing and dis­tri­bu­tion of pe­tro­leum prod­ucts. Two PSUs, In­dian Re­finer­ies Lim­ited and In­dian Oil Com­pany, were es­tab­lished in 1958 and 1959 re­spec­tively. The first re­fin­ery was set up in Guwahati in 1962 with a ca­pac­ity of 0.75 mil­lion tonnes per an­num. In 1964, In­dian Re­finer­ies Lim­ited and In­dian Oil Com­pany merged to form In­dian Oil Cor­po­ra­tion.

FU­TURE FLUX

In­dian Oil, though, faces a huge chal­lenge in the years to come. In the next three years, the com­pany needs to in­vest Rs 60,000 crore to up­grade to BS-VI stan­dard fuel. Also, by 2030, the gov­ern­ment is keen on sell­ing only cars run­ning on elec­tric­ity. By then, most trains in the coun­try would al­ready be run­ning on elec­tric­ity. That would mean fewer tak­ers for oil and a ques­tion mark on the fu­ture of oil com­pa­nies.

While the merger of Oil and Nat­u­ral Gas Cor­po­ra­tion and Hin­dus­tan Pe­tro­leum takes shape, the gov­ern­ment is al­ready work­ing on a sim­i­lar ar­range­ment for In­dian Oil and GAIL. By 2030, the ma­jor busi­ness for this new en­tity might come from gas dis­tri­bu­tion and not oil.

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