The Mukesh Ambani-run Reliance Industries has reopened about two-thirds of its 1,432 petrol pumps in the country and is selling about 2,000 kilolitres of auto fuel per day, RIL president-refinery business P Raghavendran said on Tuesday.
"We are selling about 2,000 kl per day from 900 petrol stations, mostly in the Western and Southern markets," he said in New Delhi, adding at many of these stations, it is selling the fuel at rates on par with the heavily subsidised price of its public sector rivals.
Reliance had shut its 1,432 filling stations in March 2008 after sales dropped to almost nil as it could not match the subsidised price offered by the government-owned IndianOil, Bharat Petroleum and Hindustan Petroleum, who got compensated from the government for selling fuel below cost.
"We are selling where we can match PSU price," he said.
The three state-run retailers sell petrol at Rs 3.85 a litre lower than cost of production and diesel at Rs 3.71 per litre lower.
Raghavendran said we are the only nation that is so heavily dependent on imports to meet oil needs yet subsidies the fuel heavily.
Unlike sectors like fertilisers, the oil subsidy is limited only to public sector firms, he said, and pointed out that in the 2008-09 fiscal, the government issued oil bonds worth over Rs 103,000 crore (Rs 1,030 billion) to PSU fuel retailers for selling petrol, diesel, domestic cooking gas and kerosene below cost.
The model of permanently adopting such a large subsidy programme is not sustainable for the economy, he said.
Reliance surrendered its only-for-export status for one of its refineries in Jamnagar which is now being used to supply fuel to its outlets.
Essar Oil, which used the sliding oil prices since October 2008 to reopen 1,292 out of its 1,316 petrol pumps and is planning to add another 1,500 in next one year, is also selling fuel at almost the same rates as PSU rates.
Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum get bonds from the government and discounts from crude producer Oil and Natural Gas Corp for selling petrol, diesel, domestic LPG and kerosene below cost. The same compensation is not given to private retailers like Reliance, Essar and Royal Dutch Shell, he pointed out.
