Diesel at doorstep? Possible if OMCs' plan succeeds

Oil marketing companies IOC, BPCL and HPCL have invited expressions of interest from start-ups that wish to be enrolled as fuel entrepreneurs for doorstep delivery of high-speed diesel through mobile petrol pumps.

In what might be the Uber-Ola moment for fuel retail in India, oil marketing companies (OMCs) are planning to rope in start-ups or FuelEnts (fuel entrepreneurs) for doorstep delivery of high-speed diesel (HSD) through mobile petrol pumps.

This move is expected to help garner around Rs 9,000 crore of investments, according to industry experts.

The OMCs - Indian Oil, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation - have invited expressions of interest (EoIs) from start-ups that wish to be enrolled as FuelEnts.

The firms that were already in the sector as partners of OMCs will now become official resellers after turning FuelEnts.

The major players already running home delivery of diesel include FuelBuddy, Repos Energy, Pepfuels, MyPetrolPump, and Humsafar.

A source said around Rs 2,000 crore of revenue is up for grabs for interested players in the next 12-18 months.

Calling for EoIs on July 15, IOC said the aim was to register start-ups to set up the door-to-door delivery of diesel as a business proposition.

“To improve last-mile delivery, the government is promoting less capital petrol pumps, that can be operated with a small investment of Rs 20-30 lakh.

"We expect at least 30,000 entrepreneurs to get registered as FuelEnts, that may see investments to the tune of Rs 9,000 crore.

"We have a presence in 130 cities and plan to expand with this move,” said Chetan Walunj, CEO, Repos Energy, which is a start-up backed by Ratan Tata.

The total diesel consumption in India in 2019-20 was 82.6 million tonne (mt), down by 1 per cent from 83.5 mt in 2018-19.

The FuelEnts will be able to substitute the supply location or retail outlet if the dealer gives a consent letter and has loading facility for the mobile dispensers at the retail outlet, according to Petroleum and Explosives Safety Organisation (PESO) regulations, the EOI document said.

“This is going to be the Uber-Ola moment in fuel retail.

"It will open up at least 30 per cent of the overall diesel market for start-ups.

"Moreover, the demand for diesel is going to increase in the coming years and, hence, this will be a game changer,” said Adnan Kidwai, co-founder of FuelBuddy.

Photograph: Francis Mascarenhas/Reuters