CHENNAI: Essar Oil, one of the largest private fuel retailers in the country, is set to embark on an aggressive expansion spree. The company’s chairman Prashant Ruia said on Thursday that it plans to double the number of petrol pumps to 5,600 in the next 12-18 months.
Essar operates nearly 20 million tons of oil a year at its refinery at Vadinar in Gujarat. However, Ruia pointed out that the company is earmarking a capex of `1,200 crore to upgrade certain units of the refinery to help boost margins by $1.5 per barrel.
“We have... over 2,800 operational outlets across... the country and over 2,800 at various stages of implementation to capitalise on the rising demand of transportation fuel,” Ruia said in the company’s annual report.
According to Ruia, sales from retail operations had grown by 127 per cent from 590,000 tons in financial year 2014–15 to 1.34 million tons in 2015-16. “This growth,” he said, “was mainly on account of expansion of company’s retail network as well as the opportunity presented to the private players in the retail segment by deregulation of diesel prices, thereby linking the price of diesel to the global market.”
As for the investment in the refinery, CEO L K Gupta said: “The company has already invested `400 crore during the shutdown of the refinery in September-October last year. Furthermore, `1,200 crore shall be invested to make additional upgrades in the various refinery units over the next 2-3 years,” he said.
In October, Essar’s promoters agreed to sell 98 per cent stake in Essar Oil to Russia’s Rosneft and its partners for about $13 billion.