Oil marketing major IBP has drawn up a fleet management system to grab a larger pie of the transport sector, the biggest consumer of diesel.
The arrangement with transport companies will enable IBP to ensure customer loyalty in its target group of bulk buyers of petroleum products and consumables.
Sources at IBP said, "IBP will provide an end-to-end solution for transport companies as well as shippers. It will offer consumable such as diesel. coolants, lubricant and also provide replacement tyre on credit to companies which opt for the package."
Under the fleet management system, a transporter will be able to match his payment cycle from shippers to payments to be made for consumables.
For IBP, this will also ensure higher volume of diesel sale. "Today, truck or even bus drivers buy fuel and consumables from any company. Now they will buy only from IBP retail outlets," the source said.
Moreover, IBP plans to evolve a system which will offer assured cargo for truckers. The package could be a bonanza for the transport company as this will significantly improve their cash flow.
Today, a transporter has to buy diesel, other consumables, lubricants upfront whenever goods have to be transported.
However, the shipper pays the bill for the service after some time following raising of bill, its processing and clearance.
During the time gap between purchase of consumables and the receipt of payment from shipper, the transporter has to arrange for private finance to keep his trucks going.
A detailed plan is being worked out. The package will focus on transport companies and those running regular services with very low vehicle idle times.
The development gains in significance as India is a predominant diesel market and bulk of it is cornered by transport sector. In 2002-3, transport sector accounted for 59.8 per cent of diesel consumption in the country.
With the deregulation of the oil sector, state-run PSUs been aggressive in wooing customers. Private players such as Reliance, Essar and Shell and state-run companies ONGC and Numaligarh Refinery are going to hit markets within one and half years.
It has now become imperative for companies such as Indian Oil, Bharat Petroleum, Hindustan Petroleum and IBP to find new avenues to corner market share.
IBP, the smallest among all oil marketing companies with 9 per cent retail market share, was most agile last fiscal when it added more number of retail outlets than other big three.
It set up more than 500 pumps of the 750-odd new pumps commissioned in the last 6-8 months after a historic Supreme Court ruling led to cancellation of large number of petrol pump outlets and lifted some of the restrictions on opening of new pumps.
It is planning to invest Rs 1,000 crore (Rs 10 billion) over coming two years to put up new retail outlets and upgrading the existing ones.
Now IBP has around 2,000 retail outlets and another 1,000 is expected to added this fiscal alone.
IBP intends to focus on highways, mainly Golden Quadrilateral for the expansion. Last year, company consolidate its presence in southern and western market.
As the non-fuel initiative, IBP has tied up with Amul, Lipton and for merchandising and more such arrangements are on the cards.
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