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CHAPTER-1

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INTRODUCTION TO THE SUBJECT:

1.1 Theoretical Foundation:
 Petroleum Retailing in India

Indian retail business is the fastest growing business in India. It accounts for over 13% of
country’s G.D.P.and around 10% of the country’s employment. Indian petroleum retail sector
is fastest growing sector with a contribution of over 13% in country’s G.D.P. The petroleum
retailing industry in India faces significant challenges in the deregulated environment
coupled with intense competition, a downward pressure is exerted on margins forcing players
to adopt new and innovative strategies.
India has deregulated the pricing mechanism for retail petroleum in 2002, enabling new
players to enter into the market.
The entry of new players like Reliance has increased the no.of petrol stations from existing
15000 to more than 30000 in the past five years.
This will also reduce the average throughput per station, and total fuel volumes per player.
With a market determined pricing mechanism, prices will have to be lowered, thus reducing
margins from fuel products. With limited growth in the number of vehicles, the retail fuel
volumes will remain stagnant, thus offering little scope for further improving the overall
revenues and margins.

Indian retail industry.
The petro-retail Petroleum retailing is a retailing in which differentiation is possible both in
service and product. India has close to 13 million retail outlets-the highest in the world while
the retail industry is close to Rs.9 lakh crore, growing at 20 percent but organized retail is
only 2.5 percent of the pie, through growing at a healty rate of 35 percent. the downstream
petroleum retailing can
sector can be termed as one of the most organized sector of the retail industry. Now, it is not
all about offering fuel only at the petrol stations. The new look petrol pumps, apart from
dispensing fuels, now offer the best of retail chains providing a value added service to busy
consumers. This trend is in circulation in the international markets and the big petrol station
convenience stores earn more than30 to 40 per cent of their profits from the non-fuel
activities. The range of value added services is all beneath one roof. The new-look petrol
pumps are now the more advanced multi-purpose dispenser petrol-pumps.

The petrol pumps are computerized, thus reducing waiting time which not only ensures
accuracy, but also saves a lot of time for customers and avoids misconception and arguments.
But the history of petro retailing is not of same kind. In order to study the history of petro-
retailing era can be
classified into two era’s.
● Pro APM( Administrative Pricing Mechanism) era

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● Post APM era

Indian Petro-Retail Sector- Pro APM Era
The development of petrol-retail sector in India has witnessed three distinct phases:
a) Period of dominance of multinational companies
b) Advent of public sector, its growth in co-existence with these transnational companies.
c) Marketing by the wholly government-owned companies and the fulfillment of socio-
economic objectives.
At the time of independence, the marketing & retailing of petroleum products was in the
hands of private companies like Caltex, Esso, Shell etc. Later the government gradually
exercised control through public sector companies.

The second phase started with actions taken in pursuance of the Industrial Policy Resolution,
1956 to promote growth of the vital petroleum sector under the state control. Eventually, IOC
was formed in 1959, IBP was acquired in 1970, HPC came into existence in 1974 and BPC in
1976.
In the third phase, the experience gained by the government during the second phase and the
socio-economic factors encouraged it to go ahead for acquiring the assets ofall multinational
companies operating in the country. In 1981, the entire oil industrywas truly in the
government fold.

A new era of planned development in consonance with national priorities under the overall
direction of the government thus began in the oil sector. From the state of cut-throat
competition in marketing and distribution, the PSUs had to quickly adapt to the changed
scenario. The assets of oil companies in terms of infrastructure facilities were now the
national assets. The important area of concern was their optimum utilization.

Administrative Pricing Mechanism in Petro Retailing:

Up to 1939, there were no controls whatsoever on the pricing of petroleum products.
Between 1939 and 1948, the oil companies themselves maintained pool accounts formajor
products without any intervention by the government. In 1948, an attempt was made to
regulate prices through Valued Stock account procedure. Under this procedure realization of
oil companies was restricted to the import parity price of finished goods (with Ras Tanura as
the basing point), plus excise duties/ local taxes/ dealer margins and agreed marketing
margins of each of the refineries. Any excess realization was surrendered to the Government.

In 1976, the Oil Pricing Committee (OPC) recommended the discontinuance of the import
parity principle on the ground that about 90% of the total demand of POL products was met
by indigenous production and no major shortfall was anticipated. The OPC therefore
suggested that the domestic cost of production should be the determining factor for pricing of
petroleum products. The present day APM was evolved on the recommendation of the OPC
and came into existence on December 16, 1977.

One of the important drawbacks of the import parity pricing was that the indigenous cost of
production was totally overlooked while determining producer prices. This issue was

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cross subsidization resulted in distortion in the consumer prices. ONGC (1. opened up retail marketing of automotive transportation fuels (petrol. and Shell (2.of India decided on a comprehensive package to undertake Phased dismantling of APM.oil pool deficit rose to alarming levels. by which refiners were allowed to "retain" out of the sale proceeds. players who satisfy the entry criterion i. • More communication with the customers in the media and onsite • Building PFS. Q&Q as a brand • From fuel dispensing to multi product selling 4 . Based on the recommendation of these committees. although effective for two decades. the Government of India on April 1. The New Players in Petro-Retail Sector: The deregulation of the marketing sector has led to the grant of marketing rights to Reliance Industries (5.849). diesel) to private and foreign companies with 100% FDI allowed. The same mechanism was extended to marketing & distribution companies as well. adulteration and misuse of subsidies resulted were rampant. 1997.of India issued a timetable for the phased reforms. 1997. Also.500). With the administration of pricing of products by the government. Essar Oil (1.2002. BPCL.700). the R- group and the Nirmal Singh Committee. The APM. Anticipating the immense competition ahead in the petro-retailing the existing oil marketing companies has geared up and the following are the changes that have occurred in recent past since the deregulation of downstream oil industry. of India initiated a phases era of reforms in the oil industry by forming different committees like the Sundarajan Committee in 1995.refining pipelines or terminals were allowed to set up retail network for marketing petrol and diesel with immediate effect.companies which have the capabilities to invest Rs. there was no incentive to improve efficiency with assured returns. the retention mechanism also came to be known as the Administrated Pricing Mechanism or APM.000). Govt.e. Based on the recommendation of the Naresh Narad Committee on regulation of marketing of controlled products. 2002. The Government of India also fixed the pricing of finished products and the returns of oil companies were de-linked from the price at which the goods were finally sold. the Govt. • Shifting focus from the urban to highways and sub-urban areas. Pursuant to the decisions contained in the aforesaid resolution of November. Liberalisation in Marketing Sector: Keeping its promise of decontrolling pricing and control over marketing structures. new players can set up a number of outlets as long as they commit to set up certain 11% of total number of outlets in remote and low service areas.addressed through Retention Pricing Mechanism. started exhibiting cracks when subjected to the joint pressures of spiraling demand and global prices. the Govt. In a gazette notification dated November 21.20 billion in oil exploration and production. 1997 the government decided to dismantle the APM in the petroleum sector with effect from the April 1. on September 1. IOC and IBP were allowed to undertake retail marketing in automotive fuels. In such situation. This marked the end of an era in which only state owned HPCL. Club HP.

If the oil prices are high because of high demand they will stay there for much longer. Political instability: Most of the known oil reserves are in one part of the world. are going full steam ahead to capture the largest share of the pie. The global consumption went up by 4. It is called coupling of economies. This. Interest rates the world over have been very low and this.As China is a net importing country for oil it will add to world’s demand for oil. Most of demand has come from China. However. up by 30% from today.e. but as the China go on progressing it will result in increase in transportation and hence its demand for oil will also rise. there is only one way where the oil price is headed: upwards.000 petrol retail outlets expected in the next 5 years. Also what needs to be understood is the link between and interest rates. This is the foundation of the Indian petroleum industry.The biggest reason for increase in the oil prices is United states of America which consumes about one fourth of the global fuel.This was not the case when the world went through supply-led oil shocks.5% last year. Thing is that Indian as well as all other economies are connected to each other. where once the supplies were restored fell. Although demand hasn’t increased up to that level in this year.• From commodity selling to brand marketing • From executive level sales management to intermediary supervisory cadres • From direct controls to third party audits – these certifying agencies require their own infrastructure • From dealer proprietor to reputed companies from other sectors making forays into petro- retail management Given today's open & competitive environment. The oil efficiency of vehicles in the US has now fallen to a 20-year low. both existing and new entrants. as developing countries keep improving their standards of living and automobiles remain a symbol of aspiration. the private players have added only a little over 450 retail outlets. oil marketing companies. Last year China’s demand grown by almost 15%. has led to an increased demand for oil and thus the increase in oil price. in turn. Thing is that presently the factors that are causing a change in the oil prices are being discussed below Global Demand: This surge in oil prices is because of increase in demand from developing countries like India and China. Further. Indonesia and 5 . Nigeria. The other major petroleum exporting countries are Russia. West Asia (or the Middle East). While the PSUs have added more than 3000 retail outlets to their network in last three years since deregulation. Its energy policy does very little to ensure greater fuel economy in cars or sports utility vehicles. in turn. i. there is going to be a downward pressure on profit margins and revenue per outlet which will push the industry to reinvent itself. we can say that with 30. Whatever happens in one economy it results in change in the scenario of other economies. has led to increased consumption.

cars jockeying for position. is becoming increasingly motorised. sparking investment in roads and other infrastructure. Moreover. Small towns are expanding at a rapid pace. energy costs will rise and the cost of doing business will go up. As people will have huge amount of money to buy their own vehicles. The fact that OPEC has reiterated time and again that it will not allow prices to fall has helped these speculators. FICCI (2007): According to FICCI survey on fuel retailing industry in India . in turn. There is a very good chance for Indian fuel retailing sector to gain big hold in the market. Automobile sales. Typical old-fashioned Indian service stations feature long queues.to six-lane highways. they concluded that the rising rate of growth of GDP. Speculation: Another reason for the northward movement of oil price is speculation. will affect the profit of companies. If something like this does happen. These countries have been politically unstable in the recent past and this has also led to the oil traders demanding a premium. which today number just over a million vehicles a year. 2. aims to link the cities of New Delhi.Pension funds have also made a beeline and have poured in a lot of money into securitized investments in This has led to sustained high prices of oil. making India the third-largest automobile market in the world after China and the USA. rising purchasing power of people with higher propensity to consume with preference for sophisticated brands would provide constant impetus to growth of petroleum industry. The country’s aspiring middle class.Venezuela. The largest express highway project in India. This. So as per as FICCI automobile sector will emerge as the front running sector in India. it will create havoc in the equity markets. Kolkata and Chennai with a system of four. could reach 20 million a year by 2030. the fact that many of India’s service stations are poorly designed and congested leaves a natural opening for newcomers who offer a better alternative. As oil price go up.2 REVIEW OF LITERATURE: 1. So big equity funds the world over are investing in oil futures to hedge against the risk of the value of their other investments falling. predicts US-based consultancy Keystone. The potential market will be rural one which is still being untapped. oily forecourts and hand-operated petrol pumps that may not accurately measure the volume of each sale. Some experts have recently talked about oil prices touching even a high of $150. So they need to concentrate on Indian rural market. for example. Mckinsey (2006): The Indian market for transportation fuels holds a lot of promise. Rural India which constitutes about 70% part of India will drive the major chunk of income of oil companies. 6 . recently estimated at 40 million households by consultancy McKinsey. Mumbai. 1.

CHAPTER-2 7 .

2.1 INTRODUCTION TO TRTHE INDUSTRY

The oil industry can be divided into three major components: upstream, midstream and
downstream. The upstream industry includes exploration and production activities, hence is
also referred as the exploration and production (E&P) sector. The middle stream industry
processes, stores, markets and transports commodities including crude oil, natural gas,
natural gas liquids (NGLs) like ethane propane and butane and sulphur. The downstream
industry includes oil refineries, petrochemical plants, petroleum products distributors, retail
outlets and natural gas distribution companies. The downstream industry provides consumers
thousands of products such as gasoline, diesel, jet fuel, heating oil, asphalt, lubricants,
synthetic rubber, plastics, fertilizers, antifreeze, pesticides, pharmaceuticals, natural gas and
propane. Both internationally and within India the oil and gas sector is characterized by
existence of "integrated" companies, which are present in all these three sectors.

Upstream sector: Exploration and production

Upstream sector, the first part of the oil and gas industry, deals with exploration and
production of oil and gas. Oil exploration takes place at oil wells in four stages. The first
stage is drilling, act of boring a hole through which oil or gas may be produced if
encountered in commercial quantities. The second stage is completion, process in which the
well is enabled to produce oil or gas. The third stage is production, production time of oil and
gas and the final stage is abandonment, where the well no longer produces or produces so
poorly that it is a liability to its owner and is abandoned. An oil field is a region with an
abundance of oil wells extracting petroleum (oil) from below ground. Because the oil
reservoirs typically extend over a large area, possibly several hundred kilometres across, full
exploitation entails multiple wells scattered across the area. There are more than 40,000 oil
and gas fields of all sizes in the world (BP statistical Review, 2006) and the largest
discovered conventional oil field is the Ghawar Field (75-83 billion) is Saudi Arabia. In
tandem with the stagnated reserves, the production of oil has also been sluggish over the last
decade, as a matter of fact in last ten years oil production has increased by only 1.6%.

Downstream: Refining and marketing

Refining, the second part of the oil industry after exploration and production, is related with
manufacturing petroleum products by a series of processes that separate crude oil into its
major components and blend or convert these components into a wide range of finished
products, such as gasoline or Aviation Turbine Fuel. Refining capacity depends on the
technology used in refineries, capable of processing crude production into clean fuels. In the
recent age of decreasing oil production refining capacity have to have well supportive
technology, which meet increasingly more stringent environmental Standards. With the
increase in global oil demand and stagnant reserve, refining capacity deserves new capacity
addition to meet demand. But the graph shows slightly increasing trend of refining capacity
till date in last decade. Refinery throuput, as opposed to designed capacity, is computed by
dividing the number of refined barrels of oil processed by the actual number of days the
refinery was in operation. Refined capacity is lower than refined throuput in the graph below

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implying underutilisation of capabilty of processing crude in the existing refineries and lack
of upgradation.

2.1a) HISTORY AND GROWDTH OF INDIAN OIL INDUSTRY:

The origin of oil & gas industry in India can be traced back to 1867 when oil was struck at
Makum near Margherita in Assam. At the time of independence in 1947, the Oil & Gas
industry was controlled by international companies. India's domestic oil production was just
250,000 tonnes per annum and the entire production was from one state - Assam.

The foundation of the Oil & Gas Industry in India was laid by the Industrial Policy
Resolution, 1954, when the government announced that petroleum would be the core sector
industry. In pursuance of the Industrial Policy Resolution, 1954, Government-owned
National Oil Companies ONGC (Oil & Natural Gas Commission), IOC (Indian Oil
Corporation), and OIL (Oil India Ltd.) were formed. ONGC was formed as a Directorate in
1955, and became a Commission in 1956. In 1958, Indian Refineries Ltd, a government
company was set up. In 1959, for marketing of petroleum products, the government set up
another company called Indian Refineries Ltd. In 1964, Indian Refineries Ltd was merged
with Indian Oil Company Ltd. to form Indian Oil Corporation Ltd.

During 1960s, a number of oil and gas-bearing structures were discovered by ONGC in
Gujarat and Assam. Discovery of oil in significant quantities in Bombay High in February,
1974 opened up new avenues of oil exploration in offshore areas. During 1970s and till mid
1980s exploratory efforts by ONGC and OIL India yielded discoveries of oil and gas in a
number of structures in Bassein, Tapti, Krishna-Godavari-Cauvery basins, Cachar (Assam),
Nagaland, and Tripura. In 1984-85, India achieved a self-sufficiency level of 70% in
petroleum products.

In 1984, Gas Authority of India Ltd. (GAIL) was set up to look after transportation,
processing and marketing of natural gas and natural gas liquids. GAIL has been instrumental
in the laying of a 1700 km-long gas pipeline (HBJ pipeline) from Hazira in Gujarat to
Jagdishpur in Uttar Pradesh, passing through Rajasthan and Madhya Pradesh.

After Independence, India also made significant additions to its refining capacity. In the first
decade after independence, three coastal refineries were established by multinational oil
companies operating in India at that time. These included refineries by Burma Shell, and
Esso Stanvac at Mumbai, and by Caltex at Visakhapatnam. Today, there are a total of 18
refineries in the country comprising 17 in the Public Sector, one in the private sector. The 17
Public sector refineries are located at Guwahati, Barauni, Koyali, Haldia, Mathura, Digboi,
Panipat, Vishakapatnam, Chennai, Nagapatinam, Kochi, Bongaigaon, Numaligarh,
Mangalore, Tatipaka, and two refineries in Mumbai. The private sector refinery built by
Reliance Petroleum Ltd is in Jamnagar. It is the biggest oil refinery in Asia.

By the end of 1980s, the petroleum sector was in the doldrums. Oil production had begun to
decline whereas there was a steady increase in consumption and domestic oil production was
able to meet only about 35% of the domestic requirement. The situation was further

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rcompounded by the resource crunch in early 1990s. The Government had no money for the
development of some of the then newly discovered fields (Gandhar, Heera Phase-II and III,
Neelam, Ravva, Panna, Mukta, Tapti, Lakwa Phase-II, Geleki, Bombay High Final
Development schemes etc. This forced the Government to go for the petroleum sector
reforms which had become inevitable if India had to attract funds and technology from
abroad into the petroleum sector.

The government in order to increase exploration activity, approved the New Exploration
Licensing Policy (NELP) in March 1997 to ensure level playing field in the upstream sector
between private and public sector companies in all fiscal, financial and contractual matters.
This ensured there was no mandatory state participation through ONGC/OIL nor there was
any carried interest of the government.
For this India finally formulated New Exploration Licensing Policy in 1999.After that Indian
Government has come up with six more NELP Policies. These are as listed below a) 2000-
NELP II
b) 2002- NELP III
c) 2003- NELP IV
d) 2004- NELP V
e) 2006- NELP VI
f) 2007- NELP VII

To meet its growing petroleum demand, India is investing heavily in oil fields abroad. India's
state-owned oil firms already have stakes in oil and gas fields in Russia, Sudan, Iraq, Libya,
Egypt, Qatar, Ivory Coast, Australia, Vietnam and Myanmar. Oil and Gas Industry has a vital
role to play in India's energy security and if India has to sustain its high economic growth
rate.

2.1b) Landmark of Indian oil industry:

The Indian Oil and Gas sector is one of the six core industries in India and has very
significant forward linkages with the entire economy. The oil & gas sector meets more than
two third of the total primary energy needs in the country. The sector has been instrumental
in putting India on the world map. At present India is the sixth largest crude oil consumer in
the world and the ninth largest crude oil importer. The country is also increasing its share in
the global refining market. At present Indian refining sector is the sixth largest in the world.
This position is expected to be strengthened with plans of Reliance Petroleum Limited to
commission another refinery with a capacity of 29 MTPA next to its 33 MTPA refinery at
Jamanagar, Gujarat. As a result of this the Reliance refinery would be world’s largest single
place refinery.

2.1 c)List of Companies in indian petroleum retailing sector:

1. IOC

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Mathura Refinery and Mathura- Jalandhar Pipeline (MJPL) were commissioned. Mathura. (IOC) is the flagship national oil company in the downstream sector. In 1964. with Feroze Gandhi as Chairman and Indian Oil Company Ltd. 11 .2 million barrels per day. Haldia. In 1994. Panipat. In 1982. (LIOC) was launched in Sri Lanka. Koyali. the first indigenous lubricant. S. Gujarat Refinery was inaugurated. Indian Refineries Ltd was formed in 1958.ESSAR 6. It operates the largest and the widest network of petrol & diesel stations in the country. In 1981. Haldia.HPCL 3. Indian Oil's cross- country crude oil and product pipelines network span over 9. In the same year. In 1972. 1. In 1975. Indian Oil launched SERVO. In 1965. In 1974. Digboi. In 1995. (IndianOil) was formed in 1964 through the merger of Indian Oil Company Ltd and Indian Refineries Ltd. Narimanam. (CPCL) and one of Bongaigaon Refinery and Petrochemicals Limited (BRPL). In 2003. Indian Oil commissioned Barauni Refinery and the first petroleum product pipeline from Guwahati.2. RELIANCE 5. SHELL 2. Chennai. 00. The 10 refineries are located at Guwahati. Barauni Crude Oil Pipeline (HBCPL) was completed. long Kandla-Bhatinda Pipeline (KBPL) was commissioned at Sanganer. Lanka IOC Pvt. Digboi Refinery and Assam Oil Company's (AOC) marketing operations came under the control of Indian Oil. The IndianOil Group of companies owns and operates 10 of India's 19 refineries with a combined refining capacity of 1. and Bongaigaon.000 crore and became the first Corporate in India to do so. These include two refineries of subsidiary Chennai Petroleum Corporation Ltd. (IOBL) became the wholly owned subsidiary of Indian Oil. In 2000. Indian Oil crossed the turnover of Rs l. Ltd. Haldia Baraurii Pipeline (HBPL) was commissioned. Panipat Refinery was commissioned. Indian Oil Corporation Ltd. Indian Oil Blending Ltd. India's First Hydrocracker Unit was commissioned at Gujarat Refinery.455. Haldia Refinery was commissioned. was established on 30th June 1959 with Mr. In the same year Indian Oil entered into Exploration & Production (E&P) with the award of two exploration blocks to Indian Oil and ONGC consortium under NELP-I. In 1998. Barauni.443 km. BPCL 4. Nijalingappa as the first Chairman. Indian Oil's Mathura Refinery became the first refinery in India to attain the capability of producing entire quantity of Euro-III compliant diesel.300 km. In 2005. numbering around 16. In 1967.1 d) Major players in India fuel retailing business: IOC: Indian Oil Corporation Ltd.

HPCL: HPCL is a fortune 500 company . HPCL is progressing towards setting up of a refinery in the state of Punjab in the joint sector. the company grew out of the enterprises of the Rangoon Oil Company.5 million tonnes in 1984/85 to 13.448 crores in FY 2006-07 and Rs 1. which had been formed in 1871 to refine crude oil produced from primitive hand dug wells in Upper Burma. LPG Bottling Plants. The vast marketing network of the Corporation consists of Zonal offices in the 4 metro cities and over 85 Regional offices facilitated by a Supply & Distribution infrastructure comprising Terminals. Our refining capacity steadily increased from 5. A lot of petroleum refineries also came up. (East Coast) with a capacity of 7. HPCL also owns and operates the largest Lube Refinery in the country producing Lube Base Oils of international standards. With a capacity of 335 TMT.03. a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. In addition. Though incorporated in Scotland in 1886.892 Million). An important player in the South Asian market then was the Burmah Oil Company. when Mr.837 Crores in FY 2007-08. On the financial front.03.837 Crores ($ 25.Major Achievements of Indian Oil Corporation • Currently India's largest company by sales.95% in Mangalore Refinery & Petrochemicals Limited. 2687 crores in 1984-85 to an impressive Rs 91. the turnover grew from Rs. This Lube Refinery accounts for over 40% of the India's total Lube Base Oil production. Aviation Service Stations.70 million metric tonnes (MMT) presently. The search for oil in India began in 1886. The Corporation over the years has moved from strength to strength on all fronts. The Corporation operates 2 major refineries producing a wide variety of petroleum fuels & specialties. and Inland Relay Depots & Retail Outlets. one in Mumbai (West Coast) of 5. 12 . BPCL: The 1860s saw vast industrial development.5 MMTPA capacity and the other in Vishakapatnam. Corresponding figures for FY 2006-07 are: Rs 91.448 crores ($20.142 Millions) during FY 2007-08. • 20th largest petroleum company in the world.. with an annual turnover of over Rs 1. • Highest ranked Indian company in the prestigious Fortune 'Global 500' listing.5 MMTPA. 16% Refining & Marketing share in India and a strong market infrastructure. at 135th position. HPCL holds an equity stake of 16.

In 1928. The development and promotion of efficient kerosene-burning appliances for lighting and cooking was an important part of kerosene selling activity. followed by service stations.2 MMTPA (Million Metric Tonnes Per Annum) Refinery open on 17th March 1955. particularly in Indian and Burmese markets. the company introduced LPG as a cooking fuel to the Indian home in the mid-1950s. Bo Burmah Shell group of companies and the Government of India on 15th December 1951. In 1889. . Man and machine worked relentlessly. training road engineers. Rothschilds . It was 13 . Burmah Shell Refineries Limited was incorporated as a private limited company under the Indian Companies Act on 3rd November 1952. retail sales points were built with driveways set back from the road. The refinery on 454 acres of land at village Mahul went on-stream on 30th January 1955. It provided free technical services to industrial customers . and soon the swamps gave way to towers and tanks of steel. Radakrishnan. Burmah Shell also fuelled flying boats.big and small .R. and work began on the marshland of Trombay at Bombay. An agreement to build a modern refinery at Trombay.e. This was imported in bulk and transported in 4 gallon and 1 gallon tins through rail. road and country craft all over India. Thirty years later. Asiatic Petroleum (India) joined hands with Burmah Oil Company . With motor cars. Besides selling Bitumen.came together to form a single organisation: Asiatic Petroleum to market petroleum products in South Asia. refiner and distributor of petroleum products. it went beyond selling petroleum. The largest rivals of Standard Oil . Vice President of India. John D Rockefeller together with his business associates acquired control over numerous refineries and pipelines to later form the giant Standard Oil Trust. After the war Burmah Shell established efficient and up-to- date service and filling stations to give the customers the highest possible standard of service facilities. And all along.Goodenough of McKillop Stewart Company drilled a well near Jaypore in upper Assam and struck oil. Dr. A pioneer in more ways than one. Tata's historic solo flight in a single engined de Havillian Puss Moth from Karachi to Bombay (Juhu) via Ahmedabad. to educate the customer. As a true pioneer would. the company had the honour of fuelling J. S. at several locations. While discoveries were made and industries expanded. In the 1930s.and it became a part of the company's culture.Royal Dutch. in 1962. service stations began to appear and became accepted as a part of road development. Burmah Shell began its operations with import and marketing of Kerosene. Burmah Shell again had the privilege to fuel JRD Tata's re-enactment of the original flight. the company pioneered desert road construction.an active producer. i. one year ahead of schedule.D. declared the 2. Shell. The company took up the challenge of reaching out to the people even in the remote villages to ensure every home had its supply of kerosene. when civil aviation arrived in India. and miles of pipeline. the Assam Railway and Trading Company (ARTC) struck oil at Digboi marking the beginning of oil production in India. which carried airmail at slightly higher rates than sea transport. This alliance led to the formation of Burmah-Shell Oil Storage and Distributing Company of India Limited. On 15th October 1932. came canned Petrol.

BPCL.640 Private Player RIL 898 1800 1.IBP.This is because of the fact that prior to 2002 it was only public sector OMC’s which were allowed to sell fuel in the market.540 17.SHELL.909 8. This is because they aren’t compensated by Government for their revenue losses as in the case of PSU’S. the Burmah Shell Group of Companies was taken over by the Government of India to form Bharat Refineries Limited.080 and rest followed by private players.100 HPCL 7.(RIL).RIL.ESSAR. On 1st August 1977. But Shell which has nearly 1260 retail outlets in India and operates a very small number of outlets in South India isn’t closing its operations. On 24th January 1976. and Essar.060 8. It is clear that majority of retail outlets are being operated by PSU’S while private players are operating very few.sthen the largest refinery in India then.These are viz.69% within a year. On the other hand Essar is following franchises distribution to cope up in this environment.540 16.079 3.250 Shell 32 35 37 Others 2.250 1. To explain more let us consider the statistics of no. in the country. it was renamed Bharat Petroleum Corporation Limited.035 3. of Petroleum retail outlets for different OMC’s in India: Company name March-2007 December-2007 March-2008 PSU’s IOC 16. Statistics of Total no.689 33.HPCL.058 32. It was also the first refinery to process newly found indigenous crude (Bombay High).149 1.Reliance industries Ltd.HPCL with 8. When in 2002 Government of India dismantled APM then with its entry in the retailing business Reliance grabbed market share of 14.609 8.137 35.089 8. 2.100. But they failed to live upto their expectations. India’s biggest refinery is being operated by RIL in Jamnagar. Beside these players from Public sector some private players are also actively participating in Indian petroleum industry.1 e) Market share of different fuel retailing companies in India : As explained earlier the major player in the petroleum retailing business are IOC.042 Total 34.800 Essar 1.of retail outlets of different OMC’s in India. 14 .460 retail outlets followed by BPCL with 8.Due to this Reliance recently decided to close one third of its retail outlets in India because of heavy losses.460 BPCL 7.724 36682 Sources: Indian Oil and Gas and CRISIL Research It is clear from the data that IOC is the biggest player with 17. Shell India Ltd.080 Total 32.

While the share of other PSU’s has also shown an increasing trend. Market share of OMC’s in India: Sources: Indian Oil and Gas and CRISIL Research It is clear from the graph that IOC is the biggest player in the petroleum retailing business in India.But in 2002.2%-19% during 2006-07. It was because of tie of petroleum fueling with organized retail activities. While BPCL has increased its market share from 21%- 24. It is clear that IOC is still the biggest player in the market. When private players entered into retailing business market share of public sector companies continued to decline from 15.36%.HPCL and other private players. government also allowed private players to set up their own retail outlets.56%.45% during its first fiscal. The statistics available upto 2007- 08 suggest that IOC has a market share of 49%. In the fiscal 2007-08 IOC has lost its market share from 49%-40. But in all of these private player Reliance was the only one which acquired the market share of 14. While other gainers are Essar and Shell. This is because of the fact that they aren’t given the kind of subsidies and oil bonds issued as in case of public sector oil companies. After this decision the private player started operating their retail outlets. While the share of the private player has decreased. followed by BPCL. 15 .Private player added 1006 retail outlets during March-December 2007 and public sector could only add 630 retail outlets. It is trying hard to regain its lost share.

10 0.69 47.14 0.39 0.52 23.78 0.27 4.41 RIL 4.Market share of Petroleum Company in auto fuel sector: %tage MS HSD Total share of companies April-Oct April-Oct April-Oct April-Oct April-Oct April-Oct 2006 2007 2006 2007 2006 2007 IOC 42.13 0.06 0. Share of IOC has gone down.36 18.13 26.88 52.51 ONGC 0 0 0.07 HPCL 23/69 23. These are upto October 2007 indiacating that the share of private player has improved by a small margin.50 100 100 100 100 100 100 Sources: Indian Oil and Gas and CRISIL Research: These are the figures for sales of HSD and MS for different oil companies in Indian market.74 28.35 0.47 3.41 0.85 0.03 21.56 0.31 3. The entry of new private player in the petroleum industry has resulted in the loss of market share of public companies in the market.70 42.93 26.60 SHELL 0.39 3.96 21.62 BPCL 28.21 23.28 0.75 4. This is as shown 16 .79 47.87 18. while HPCL has gained significant share of BPCL and IOC.54 4.55 52.27 ESSAR 0.26 0.

Demand and Supply Scenario of Petroproducts: There is always been a gap between supply and demand. The supply and demand gap is always been persistent for India. This was all because of rising oil prices.It is clear from the figure that IOC.This can be seen from the graph given below: Sources: Bloomberg. 17 . All these results are being forecasted by considering all the aspects of present scenario. BPCLand RIL were the major companies which lost considerable market share in auto fuel sector. This is the reason that’s why oil prices shoot up and sales of retail outlets decreases. As their research clearly points out that in coming days the gap is going to widen more between demand and supply. Edelweiss Research: According to a research carried out by Security Marketing Research agency Bloomberg (Bombay) it is going to be difficult for Indian government to get rid of this problem. The prices are also being determined on the basis of demand and supply.

This can be seen from the PPT factor prior liberalization as shown by fig. As there were lesser no. of retail outlets. After liberalization the scenario changed and PPT value come down to below 200 as shown: 18 . In order to check the health of petrol pumps the parameter used is Per Pump Thruput (PPT).Prior to liberalization in petroleum industry there were very less no. of petrol retail outlets were being opened by the private as well as public players. Which is a good factor. But as the government opened the petroleum industry for private players it resulted in increase in entry of new players and after liberalization in petroleum sector large no. So the sales of retail outlets were good enough. Sources: FICCI Petrotech.of retail outlets so the financial health of retail outlets was good enough.1. ATKERNEY January 18. 2007: The value of PPT remained around 200 KIs/pm.

of retail outlets is also another reason in the decline in the sales.of retail outlets then sale of one retail outlet increases while that of other decreases. Hence it results in increase in sale of one of the outlets and decline in the sales of other outlets. Due to this their sales fluctuates. 2007 This decrease in PPT is because of the fact that as a company operates large no. So increasing no.Sources: FICCI Petrotech. 19 . ATKERNEY January 18. Then to counter this their competitors also open their retail outlets. Their sale may increase but the overall sold volume of petroleum products remains same.

Due to rising oil prices the public sector companies has to bear the losses. It is clear that under recovery for diesel is Rs.3/liter for the sale of petrol. This is as shown below by the following charts: This is clear from the graph that there is increase in the underecoveries on the sale of auto fuels.5/liter and Rs. CRISIL Research 20 . This is done by providing subsidies from upstream sector and issuing oil bonds. And underecoveries for the oil companies has increased. Government has done their level best in order to compensate for the under recoveries of the oil companies.million) 2005-06 2006-07 2007-08 2008-09 P Subsidies 140000 205000 208462 181365 shared by upstream sector Oil bonds by 115000 240500 244562 212773 Government Total 255000 445500 453024 394138 Sources: Indian Oil and Gas.This is shown in the form of table as shown: ( Rs.

the existing as well as private oil companies are trying to strengthen their retail network continuously. In the changed scenario.1 f) Challenges ahead for Indian petro-retail sector: a)No real Market Determined Pricing  Three years passed since APM was dismantled but still the promise of Government of india to establish a regulatory board has not bore fruit and it seems that the government has made an “April Fool”* of all of us. whosoever would be in the possession of adequate infrastructure for transportation. today’s consumer is becoming more  and more demanding. Consumer’s increasing expectations  With growing competition in the petro­retailing sector. He looks for­  • Quality & Quantity assurance  • Quick filling and efficient forecourt service  • Rewarding loyalty  • Premium fuels  • Cashless transactions  • Non­fuel services  c) Need to provide alternate sources for revenue  21 . storage and distribution will emerge as winner in due course of time. A closer look at these segments tells us what exactly a Consumer is looking for whenever he goes to a fuel station to purchase fuel. the sector is destined to witness immense competition in the future.It is clear from table that the under recoveries has increased by greater proportion and government has passed this burden to India’s upstream companies and also has shed this burden itself. The emergence of new psychographic segments in petro­retail market  bears the testimony to this fact. Instead of selling it in domestic market they have turned onto the export side.As a result of this Reliance shut down its petroleum operation in India. but in practical the petro-products price is still determined by the government. They are getting better returns from export than selling it in domestic market. Consultation with the oil companies and the price competition has not happened yet. b) Cut-throat Competitive environment With the coming of the private players in the petro-retailing. Now its implication is that although APM is not in use in theory. A serious battle revolving around the pricing and related competition would potentially come into play only with the active involvement of the private sector in the marketing segment. These subsidies and oil bonds are provided to public sector companies only not to the private players . So there is a great shuffle in Indian petroleum retailing industry. With this game plan in mind. the government has taken enough steps to ensure that the new entrants could not have an easy route to build a retail network. The government had specified that private companies could not poach on the outlets of state-owned oil companies for a period of five years starting 1 April 2002. However. 2.

 the oil companies are busy in bringing the branding  concept in petro­retailing which was a commodity market for years with no differentiation. Since the base product is same. he is looking at a one stop solution to all his  needs – buying groceries. Xtrapremium etc. Club HP and Q&Q outlets came into existence. Prestige seeker etc. the differentiating factor would be the non­fuel  services. things are not going to remain same and very soon we will see a full  range of premium branded fuels like 93­octane petrol. as to compete with the private players.1 g) Future vision of petroleum industry: a) Shift from retail outlet branding to corporate branding : Ever since the market was deregulated.”  • Need to differentiate offerings 2.  c) Emergence of non­fuel services as a major activity at retail outlets : The dismantling of APM has removed the privilege of assured returns from the PSUs and thus. These factors are­  • Increased pressures on margins  • Desire to leverage real estate and increase revenues  • Evolving customer segments like “Value time saving propositions. making utility payments. there is a lack of product assortment in this  business of branded fuels. 22 . withdrawing cash from his bank. Quality and  • Environment consciousness. it will be the best in Q&Q and others concerns. Also. Also. 97­octane petrol. there are so many branded fuels of different oil companies in the market like Speed  (BPCL).One major challenge that the oil marketing companies are facing today is the need to provide  the alternate sources for revenue. But these fuels are more or less  same with slight variations in the chemistry. it is imperative to make huge investment in the services being offered at the ROs. consistent efforts make them taste success with the advent of branded fuels such as  Speed. In other words. it has increased pressure on their margins. There is not much options to choose among. who  are with deep pockets. with high  investment in R&D. Turbojet (HPCL) and Xtrapremium (IOCL) etc. Today.  corporate branding is what on the cards in the future of petro­retailing. Many factors have triggered this new event in today’s petro­ retailing environment. However. 125­octane petrol etc. However. at the same time RO branding was initiated and PFS (Pure  For Sure). Also. But still the oil companies have not  found the way how to make a customer say pointing towards a RO that as this outlet belongs  to a particular company. the changing face of the Indian consumer is one of the main reasons behind  the non­fuel services in petro­retailing.  b)Offer of range of premium branded fuels : Today.

 fuel delivery management and fleet management systems that help customer self­service. private oil companies such as Assam Oil Company at Digboi. which called for the development of petroleum industry in India. In the last three years. On the other hand the driver on the  highways is seeking a clean and hygienic place to relax and freshen­up. ONGC has produced more than 600 million metric tonnes of crude oil and supplied more than 200 billion cubic metres of gas since its inception. there is a slew of  automation infrastructure solutions ranging from integrated point of sale terminals. Of course. But  in future. Until 1955. Drivetrack (HPCL). obtaining Pollution Under Control  Certification and of course filling fuel in his car. grabbing a quick bite. these programs are mainly  focussed at the bulk consumers and the small consumers are left unnoticed more or less. However. there won’t be such differentiation and loyalty programs will be there for every  segment of consumers. it will reduce the throughput per RO in long run. in future. However. In the pipeline. the PSUs have added more than  3000 outlets to their network. e) Attempt by all players to drive volumes to retail sites  In order to saturate the market before the private players can consolidate network. Xtrapower(IOCL).2 Profile of ONGC: ONGC (Oil and Natural Gas Corporation Limited) is India's leading oil & gas exploration company. dynamic pricing. the PSUs  are vigorously setting up new outlets. Today.  Hence in order to maintain the throughput. network planning.  Transconnect (Reliance). right now many such loyalty programs are being run  by the petro­retailers like Smart Fleet (BPCL).  aggregated data management system. retailing of petroleum products  is going to be very sophisticated and highly modernized. service his vehicle  and have a good meal at the restaurant in the pump. all players will strive to drive volumes to their  retail sites. Oil India Ltd (a 50% joint venture between Government of 23 . ONGC is India's highest profit making corporate.renewing his insurance cover. demand  forecasting and s 2. The origins of ONGC can be traced to the Industrial Policy Statement of 1948.  d)Loyalty programs an integral part: The immense competition will make loyalty programs an integral program of the day­to­day  functioning of petro­retailing. Petrocard (BPCL) and others.  f) Leveraging automation and communication for enhanced offerings  In the wake of the increased customer’s expectation. It has a share of 77 percent in India's crude oil production and 81 per cent in India's natural gas production.

ONGC was re-organized as a limited Company under the Company's Act. to ensure efficient functioning of the Oil and Natural Gas Directorate. ONGC has made six new discoveries. at Vasai West (oil and gas) in Western Offshore. Libya Myanmar and other countries. were engaged in exploration work. In August 1956. In October 1959. as a subordinate office under the then Ministry of Natural Resources and Scientific Research. ONGC found new resources in Assam and established new oil province in Cambay basin (Gujarat). To achieve this objective an Oil and Natural Gas Directorate was set up in1955. Iraq. ONGC has grown into a full-fledged horizontally integrated petroleum company. After liberalization in 1991. ORGANISATIONAL CHART 24 . In early 1970s went offshore and discovered a giant oil field in the form of Bombay High. and Indo-Stanvac Petroleum project (a joint venture between Government of India and Standard Vacuum Oil Company of USA) at West Bengal. both in Assam. OVL is pursuing exploration of oil and gas in Russia. In 1955. state-of-the-art refinery. which enhanced powers of the commission further. ONGC has a fully owned subsidiary. and Laipling-gaon (oil and gas) and Banamali (oil). 1956 in February 1994. GS-49 (gas) and GS-KW (oil and gas) in Krishna- Godavari Offshore. The vast sedimentary tract in other parts of India and adjoining offshore were largely unexplored. In 1960s.India and Burmah Oil Company) at Naharkatiya and Moran in Assam. ONGC Videsh Ltd (OVL) that looks for exploration opportunities in other parts of the world. Iran. ONGC has also acquired 72% stake in MRPL with full management control of the 9. Government of India decided to develop the oil and natural gas resources in the various regions of the country as part of the Public Sector development. Recently. The Industrial Policy Resolution of 1956 placed mineral oil industry among the schedule 'A' industries. Today. the Commission was converted into a statutory body by an act of the Indian Parliament. Chinnewala Tibba (gas) in Rajasthan. the Directorate was raised to the status of a commission with enhanced powers.69 tonne.

Government of India decided to develop the oil and natural gas resources in various regions of the country as part of the Public Sector development.3 History of ONGC: During the pre-independence period. the National Government realized the importance of oil and gas for rapid industrial development and its strategic role in defense. the Assam Oil Company and Attock Oil company in northwestern part of the undivided India were the only oil companies producing oil in the country. as a subordinate office under the Ministry of Natural Resources and Scientific Research.2.After independence. The vast sedimentary tract in other parts of India and adjoining offshore remained largely unexplored. In 1955 .With this objective. Consequently they laid great emphasis on development of petroleum industry in Industrial Policy Statement of 1948. The department was 25 . In other parts of the country exploration work was on progress. an oil and Natural Gas Directorate was set up towards the end of 1855. The major part of Indian sedimentary basins was deemed to be unfit for development of oil and gas resources. In Assam.All the major oil players were carrying out exploration of hydrocarbon resources in India. oil was being produced by the Assam Oil Company at Digboi and oil India was developing two newly discovered large fields Naharkatiya and Moran in Assam. with minimal exploration input.

constituted with geoscientists from the Geological survey of India. from time to time.West Germany. now known as Mumbai High.S. ONGC has been working very hard to transform country’s limited upstream sector into a large viable playing field.S. The most important contribution of ONGC however is its self-reliance and development of core competence in E and P activities at a globally competitive level. which were present in the country. which placed mineral oil industry among the schedule ‘A’ industries.In April 1956m the Government of India adopted the Industrial Policy Resolution. and to perform such other functions as the Central Government may. the future development of which was to be the sole and exclusive responsibility of the state. Minister of Natural Resources. K..S. ONGC went offshore in early 70’s and discovered a giant oil field in the form of Bombay High. This discovery. to function efficiently. over 5 billion tones of hydrocarbons. visited India and helped the government with their expertise. it became clear that it would not be possible for the Directorate with its limited financial and administrative powers as subordinate office of the Government. with an intention to deregulate and de-license the core industrial sectors including petroleum sectors with partial disinvestments of government equity in Public Sector undertakings and other 26 . with its activities speared throughout India and overseas also. A delegation under the leadership of Mr.Foreign experts from U. along with subsequent discoveries of huge oil and gas fields in Western offshore changed the oil scenario of the country. Malviya . were “to plan. Period after 1990: The liberalized economic policy. after the formation of Oil and Natural Gas Directorate. assign to it “The act further outlined the activities and steps to be taken by ONGC in fulfilling its mandate. which enhanced powers of the commission further.D. the Directorate was raised to the status of a commission with enhanced powers. Romania and erstwhile U. In India. the Commission was converted into a statutory body by an act of the Indian Parliament. although it continued to be under the government. visited several European countries to study the status of oil industry in those countries and to facilitate the training of Indian professionals for exploring potential oil and gas reserves. ONGC found new resources in Assam. organize and implement programmer for development of Petroleum Resources and the production and sale of petroleum and petroleum products produced by it.A.R. were discovered. promote. The main function of the Oil and Natural Gas Commission subject to the provisions of the Act. In October 1959. Soon. the visiting Soviet experts drew up a detailed plan for geological and geophysical surveys and drilling operations to be carried out in 2nd Five Year Plan (1956-57 to 1960-61). So in August 1956. Subsequently.Finally. adopted by the Government of India in July 1991. new oil province in Cambay basin (Gujarat) and also added new petroliferous areas in the Assam-Arakan Fold Belt and East Coast basins (both inland and offshore). Period during 1960-80: Since its inception.

7 Billion Cubic Meters (BCM) of Natural Gas.ONGC has established 6. Consequent to this the Government sold off 10 percent of its share holding in ONGC to IOC and 2. Profit after Tax (PAT). after taking over MRPL from A V Birla Group. curde oil production.ONGC is ranked at 23rd spot amongst “Top 250 Energy Majors of the World in the Platt’s List” based on outstanding performance in respect of Assets. With this the Government holding in ONGC came down to 84.ONGC got “Biggest Wealth Creator Award” for the third time in a row for the period 2000-2006.ONGC is the only fully-integrated petroleum company in India.ONGC is ranked amongst top 50 publicly traded Companies in Oil and Gas Industry. amongst themselves. operating along the entire hydrocarbon value chain. ONGC is the only Company from India in the Fortune Magazine’s list of the World’s Most Admired Companies 2007. As a consequence. 2. (OVL). ONGC is 9th position in the Industry of Mining.about one tenth of Indian refining capacity. Sakhalin and Sudan and earned its first hydrocarbon revenue from its investment in Vietnam.measures.ONGC topped the Business India Super 100 list based on sales. OMGC is ranked as most respected Company in PSU category in the 2006 business survey. After the conversion of business of the erstwhile Oil and Natural Gas Commission to that of Oil and Natural Gas Corporation Limited in 1993. ONGC.4 Recent Achievement and milestone: ONGC is the major player in the energy upstream sector.5 percent to GAIL. It holds largest share of acreages in India.India’s credit rating agency CRISIL and ICRA gave highest credit rating of AAA and LAAA respectively. Subsequently. from 115 fields. India has explored 7 basins. the Government disinvested 2 percent of its shares through competitive bidding. ONGC diversified into the downstream sector.It created a record by turning MRPL from BIFR to BSE Top 3 27 . ONGC has made major investments in Vietnam. This paved the way for long term strategic alliances both for the domestic and overseas business opportunities in the energy value chain. Revenues.42 billion tones of In-place hydrocarbons reserves with more than 300 discoveries of oil and gas. ONGC was re-organized as a limited Company under the Company’s Act. with 13th position in the league of the most respected Indian Corporate. ONGC will soon be entering into retailing business. During March 1999.ONGC produces 762.11 per cent.ONGC has been ranked as the Numero Uno Oil and Gas Exploration and Production (E&P) Company in Asia. Indian Oil Corporation (IOC) and GAIL the only gas marketing company agreed to have cross holding in each other’s stock. They have achieved great milestones and have a golden history behind it. In the year 2002-03. Profits and Return on Invested Capital (RIOC). ONGC Videsh Ltd.ONGC was ranked at 369th place in Fortune Global 500 list for the year 2006 based on Revenue. ONGC has also entered the global field through its subsidiary. ONGC expanded its equity by another 2 percent by offering shares to its employees.3 million metric tones (MMT) of crude and 440. as per Platts 250 Global Energy Companies List for the year 2007.ONGC is ranked at 239th position in the prestigious Forbes Global 2000 and Numero Uno ranking amongst Indian Companies. 1956 in February 1994. out of which ONGC has discovered 6. based on the year end (2007) market Capitalization by PFC Energy.It contributes about 78% of Indian oil and gas production. Net Fixed Assets and Market Capitalization for December 2006.

2005) • VACUUM GAS OIL (EXPORT) • FURNACE OIL (IS 1593 .1961) • SULPHUR (IS 6655: 1972) • MOTOR GASOLINE GRADE.1997) • FURNACE OIL (Special Grade) • FURNACE OIL (380 CST) (Export) • LOW SULPHUR HEAVY STOCK (LSHS) • BITUMEN (60-70) (IS 73 .1961) • BITUMEN (80-100) (IS 73 .2000) 28 .2.2005) • AUTOMOTIVE DIESEL FUEL (BS III) (IS 1460 .BS III MS 91 (IS 2796 .5 Product Rang of ONGC: • Liquified Petroleum Gas (IS 4579-1999) • Liquified Petroleum Gas for automotive purpose (IS 14861-2000) • Naphtha (Fertilizer Grade) • Naphtha (Export Grade) • Motor Gasoline Grade-BJII MS 88 (IS 2706-2000) • Aviation Turbine Fuel( IS 1571-2001) (Domestic) • Aviation Turbine Fuel (JET A1) • SKO (IS 1459 -2001) • AUTOMOTIVE DIESEL FUEL (BS II) (IS 1460 .

6 Performance of the company over the last few years (Statistical Profile): This is the graph for performance of ONGC for past few years. This can be seen from the graph Globally it is difficult to maintain RRR>1.It is clear that • Crude Oil production has increased considerably for past few years • The production of value added products has decreased onto certain level but in the fiscal 2007-08 it has improved • MRPL the petroleum retailing company of ONGC has performed well.It is clear from graph that company has performed consistently well for the past few years. But ONGC is the only company whcih is performing well on this front as shown in graph.2. 29 .

May 2008 It is clear from the chart that ONGC performed quite well in terms of RRR.Sources: ONGC NEWS SHELF.09. At global scenario both ONGC and its subsidiary OVL are also posting RRR>1. In its total global ranking 135% share of ONGC is 132.its foreign subsidiary is 1. For past 10 years ONGC have posted an average RRR equal to 1.02. Globally it stands at no.56% and that of OVL.96%.3 after PetroChina and ENI as shown in chart below: 30 . And in terms of past 5 years ONGC has posted RRR equal to 1.

MAY 2008 31 . MAY 2008 In terms of Oil and Gas production the recent performance of ONGC and OVL is as shown below: Sources: ONGC NEWS SHELF.Sources: ONGC NEWS SHELF.

MAY 2008 It is clear from charts that there is a slight decrease in the production of gas and oil from ONGC’S prespective.21% in the production of oil and gas.Sources: ONGC NEWS SHELF. While it’s foreign subsidiary OVL has posted a net increase of 10. According to one of the survey conducted by Indian rating agency CRISIL OVL will emerge as the biggest player in the Indian oil sector. ONGC has laid great hopes on its subsidiary OVL in future. 32 .

2. 7 Financial status of ONGC: 33 .

4. with: 1.000 crore for the first time. 20.6. Because in January-March quarter ONGC was badly hit by underrecoveries.5% to Rs. The company’s profit in the April-June quarter stood at Rs. It is because of higher revenues realization on account of higher crude prices. For the quarter ended on June. The numbers are indicating that they have not only posted huge profits but also their EPS has increased significantly.However. • Tie-up 20 MMTPA of equity Hydrocarbon from abroad.2008 profits has 44% as compared to the previous year. 5. accreting 6 billion tonnes of O+OEG). Quarterly net sales for the company crossed Rs. rising 46. Leveraging state-of-the art technology and global best practices 4. • Improving average recovery from 28 per cent to 40 per cent.20.610 crore a year ago. May decide to venture into petroleum industry 34 . It can be seen from the EPS and PAT values.It is significantly higher than 152% as compared to previous quarter.Above shown charts are indicating about the financial position of ONGC. New Discoveries and fast track development 2.636 crore against Rs.052 crore. It is clear from the charts that ONGC have done well in past years. The focus of management will be to monetise the assets as well as to assetise the money ONGC looks forward to become an integrated energy provider. Equity Oil from Abroad Downstream value additions and Forward Integrartions 3. It suggest that financial condition of ONGC is sound.8Future prospects/ plans: To focus on core business of E&P. 2. company hasn’t gained in its efficiency as is net margin-net profit as a percentage of net sales dropped to33 % in April-June quarter.e. ONGC has set strategic objectives of: • Doubling reserves (i. New source of Energy Production from small and marginal fields.

CHAPTER-3 35 .

They have performed quite well on the front of Exploration and Research (E&R).600 crore to make it ONGC’s highest paid subsidiary.1 OBJECTIVE OF STUDY: ONGC is a major player in the energy’s upstream sector. Also ONGC invested equity of Rs. This acquisition was carried out on 28th March. They entered into petroleum retailing business five year back when they acquired MRPL from A. 36 . 2003.Birla group by acquiring all the shareholding of Birla group. Due to MRPL’s success in retailing business Government of India give permission to ONGC to set up 1500 petroleum retail outlets.But they may decide to venture into this business in future. MRPL performed quite well on its front in retailing business. Through my study I want to achieve following objectives: ● To study impact of rising oil prices on the sales of petroleum retail outlets ● To study the present market scenario for petroleum Retail Company By doing this research I want to add to the knowledge of ONGC a brief picture of retailing business in India (particularly in Delhi NCR) so that in future ONGC may decide to set up their petroleum retail outlet. Although ONGC has not ventured into retail business at present scenario.V. ONGC has got exclusive marketing rights for the sale of oil and petroleum products in Indian market.3. It enlightened the retailing business for ONGC. The Research project has been carried out to aid the ONGC’S reach into retailing business.

For this survey following procedure was considered. 37 .2 Research Methodology: In order to find out the real scenario of fuel retailing in India first hand data could prove to be a major source. Procedure: ● Reading about the problem ● Deciding on objectives to proceed.3. This was very useful while developing questionnaire. ● This will give a clear idea regarding market scenario of oil companies. ● This will help ONGC to take any decision whether to venture into the retailing business or not? From this it can be concluded that Data collection is a very important part of project. This statement has the implications enlisted below: ● It will give a clear idea regarding the sales of petroleum retail outlets ● They can examine the available information in the form of data to make a decision. Data Raw Numbers Information Projected objectives were considered and a market survey was done. For this collection of raw data is very important. As raw data provides a great deal of information to the researcher and he can take decision on the basis of information obtained. ● Developing survey instruments ● Finally analyzing the data and make conclusion Process adopted: Gaining knowledge about the problem: For this the reading work was undertaken first in order to gain in depth knowledge about the problem.

The development of questionnaire took place in following steps: Step 1 Research objectives are being transformed into information objectives Step 2 The appropriate data collection methods have been developed Step 3 The information required by each objectives is being determined. Step 6 The questionnaire and layout is being evaluated.Steps in developments of survey instruments: The main instrument required for survey was a well developed questionnaire. Step 4 Questions/ Scale measurements being evaluated. Step 8 The questionnaire format is being finalized. 38 . Step 5 The number of information needed is being determined. Step 7 Revise the questionnaire layout if needed. Specific Questions/ Scale measurement format is developed.

3. A pilot study was conducted to test these questionnaires. Secondary Research: Data was collected from Websites and Catalogues to get information about the problem.For conclusive research. 2. The questionnaires were developed for owners of petroleum retail outlets and customers and in these questionnaires’s following areas covered: 1) Sales of Retail outlets 2) Preference of customer for public transportation(mainly metro) instead of their own vehicle 3) Impact of surge in global prices on the sales or retail outlets. Research Design: A two stage research was conducted. questionnaires were developed based on secondary data to gather information on the research objectives. so for this the survey of two sections was covered. In this sample of 10 people was picked up from the target population on convenience basis. The final draft of the questionnaire was then prepared based on observations from the pilot study. 39 . surge in global oil prices and the impact of increase in petroleum prices on the preference of people was being evaluated.Survey: In our research we have to find out the impact of rising oil prices on the sales of retail outlets.3Sources of Data Collection The first of research consisted of secondary data search from following sources: a) Websites b) Catalogues In this search information about present market scenario of petroleum retailing business. to determine the limitation and deficiencies in the questionnaires. These sections were a) Owner of petroleum retail outlets b) Customer who drives sales of petroleum outlets. Primary Research: A primary research was conducted. 1.

As we have to cover mainly the customers and petroleum retail outlet owners there is equal chance of being selection of every sampling element in this technique. It was difficult to break the ice with the petrol pump owners. analysis and other factors. 3. 40 . 3. 3. As in simple random sampling every item in population has an equal chance of being selected.5 Limitation of study : There were problems/obstacles faced during the initial part of project which were however overcome successfully. It was a daunting task to convince them to fill the personal information regarding volumes of petroleum products. It was difficult to convince the owners of retail outlets that the information obtained from them wouldn’t be disclosed to anybody.4b)Sampling technique: For this Simple random sampling was used in both the cases. sales of their retail outlets as this information is very sensitive for them.4 Sampling Plan: 3. It was difficult to convince people for providing time to fill the questionnaire as every one is very busy in their work.4a)Sampling place: In the present research two segments covered were a) Owners of Petroleum retail outlets b) Customers section For these two segments sample size of 50 each was being considered and for this Delhi NCR region was being chosen as sampling place. . 2. To list: 1. It removes the element of biasness in the data collection.

CHAPTER-4 41 .

The analysis of questionnaire 1 is as follows: In the very first survey 68% male and 32% females were taken as respondents. Q. Out of these people 84% were from Delhi and 16% to other states.5. then what type of vehicle do you have: Type of vehicle Frequencies Two wheeler 23 Four wheeler 18 42 . Out of these 26% people belong to student’s category.6.4. If yes. Do you have your own vehicle: Availability of vehicle Frequencies Yes 41 No 9 Frequencies 50 40 30 20 10 0 Yes No Frequencies 41 9 Interpretation: Out of these respondents 82% of people have their own vehicles and that of 18% don’t have. Q. First questionnaire is based upon survey conducted in Delhi NCR region covering a sample of 50 people about their preference for public transport due to rising oil prices. 68% service class and 6% to other categories.1DATA REPRESETATION ANALYSIS AND INTERPRETATION: The data has been analyzed on the basis of two questionnaire’s.

7. out of these people 56% people have two-wheeler and 44% people have four-wheeler.)Do you operate it onto its full capacity: Capacity utilization Frequencies 100% 6 80-100% 10 60-80% 13 50-60% 11 Less then 50% 1 Less then 50% 2% 100% 15% 50-60% 27% 80-100% 24% 60-80% 32% 43 . Q. Four w he e ler 44% Tw o w he e le r 56% Interpertation: This question reveals the fact that people who have their own vehicle.

25 2. Ha: There is no significant relationship between rising oil prices and switching of people to metro.39 13 8.488.84 0.9 What are other mode of transportation: Mode of transportation Frequencies Metro 35 Others 9 44 .59 10 8.χ² test application: By applying Chi square test (χ²) we can analyzed if there exists a significant difference among choosing mutual fund schemes Step1: State Hypothesis: Ho: There is a significant relationship between rising oil prices and switching of people to metro.5 20.2 2.34 Interpretation: As the Chi-square test statistics 5.2 2. hence null hypothesis is accepted and hence there exists a significant relationship between rising oil prices and switching of people to metro.95 χ² = 5.488.46 11 8.2 4.8 7.2 4.05 and 4 degrees of freedom.34 is less then the critical value of 9.84 0.8 7.2 1. Q. Step 3: Compute the Test Statistics: χ² = ∑ (O-E)² E Observed Expected O-E (O-E)² (O-E)² E 6 8.2 -2. Step 2: Set the Rejection criteria: DF = 5-1 = 4 At alpha . the critical value from the chi square distribution table is 9.84 0.95 1 8.8 3.24 0.

It clearly shows that rising oil prices are causing people to shift to other mode of transportation. Step1: State Hypothesis: Ho: There is a permanent shift of people to metro because of rising oil prices. Ha: There is not a permanent shift of people to metro because of rising oil prices. Step 2: Set the Rejection criteria: DF = 5-1 = 4 45 .10) Is this switch over temporary or permanent: Switch over Frequencies Strongly permanent 4 Mostly permanent 17 Undecided 10 Temporary 2 Strongly permanent 2 χ² test application: By applying Chi square test (χ²) we can analyze the switch over to metro is permanent due to rising oil prices. Q. Others 20% Metro 80% Interpertation: From this pie chart it can be interpertated that people who don’t use their vehicle to its full capacity have switched over to metro or other mode of transportation. It signifies that due to this switch over people are buying less oil for their vehicle and hence sales of retail outlets are declining.

It is clear to all that oil prices are volatile and they keep on fluctuating depending on demand-supply constraints.28 2 7 -5 25 3. At alpha .57 χ² = 23.488.69 Interpretation: As the Chi-square test statistics 23. the critical value from the chi square distribution table is 9. Hence people are still hopeful that these higher oil prices will ease out in coming days.69 exceeds the critical value of 9. Q. Step 3: Compute the Test Statistics: χ² = ∑ (O-E)² E Observed Expected O-E (O-E)² (O-E)² E 4 7 -3 9 1.28 17 7 10 100 14.488 hence null hypothesis is rejected and hence there is not a permanent shift of people to the metro because of rising oil prices.28 10 7 3 9 1.05 and 4 degrees of freedom.11) If switch over is temporary.57 2 7 -5 25 3. what is the reason for this switch over: Reason for switch over Frequencies Higher oil prices 9 Others 1 Frequencies others 10% higher oil prices 90% 46 .

5 Mention supplement operations: 47 . 10. Second questionnaire was developed to find out the sales of petroleum retail outlets. 90% of those blame higher oil prices for this switch over. So the sales are declining. While other 10% people have other different reason to switch over. 91% of them relates this switch over to higher oil prices and 9% of people relates this to the time factor. As people have switched over to metro so they have very little tendency to go to petroleum retail outlets and buy oil. The analysis of second questionnaire is as follows: Q. Reason for permanent switch over: Reason for permanent switch over Frequencies Higher oil prices 21 Time factor 2 Others Frequencies Time factor Others 9% 0% Higher oil prices 91% Interpretation: Above pie-chart reveals that people for whom switch over is permanent. In this questionnaire 50 retail outlets of different oil companies were covered.Interpretation: According to this pie-chart it can be concluded that people for whom switch over is temporary. This was the analysis part of first questionnaire. It clearly shows the impact of rising oil prices on the sales of petroleum retail outlets. This is similar to that of temporary switch over of people so higher oil prices are forcing people to switch over to metro or other public transport and hence sales of petroleum retail outlets are declining in Delhi NCR region.

Q.6)Mode of operations: Mode of operation Frequencies COCO 4 CODO 46 DODO 48 . Supplement activities Frequencies Yes 23 No 27 Frequencies Yes No 46% 54% Interpretation: According to this pie-chart it can be interpreted that 46% of petroleum retail outlets are being accompanied by supplement operations while 54% of retail outlets don’t have these facilities. It shows that Indian petroleum industry is undergoing a transformation face that not only fuel retailing but also non-fuel retailing activities have a major role to play.

convenience stores etc.It clearly shows that mostly all the retail outlets are CODO types means company owned dealer operated. 6% mostly agree and 4% mostly disagree.8) Supplement operation leads to increase in customer base. In India DODO type of retail outlets are very less and only Reliance is the player who has large base of DODO type retail outlets. How will you rate this statement. According to 90% of them strongly agree. restaurants. Q. The graphical representation of this statement is as shown below: 49 . Rating scale Your response Strongly agree 45 Mostly agree 3 Mostly disagree 2 Strongly disagree In this question the owners of petroleum retail outlets were asked about the fact whether supplement operations like car wash. Frequencies DODO 0% COCO 8% CODO 92% Interpretation: This pie-chart reveals that 92% of the retail outlets are of CODO type and 8% are of COCO type. It clearly shows that how much these non-fuel activities are important and they are going to play a major role in coming days. play a vital role to increase their customer base.

95 and 4 degrees of freedom.08-March08 86 34 April08-June-08 93 31 χ² test application: By applying Chi square test (χ²) we can analyze if the sales of HSD are greater than that of branded diesel. Step 2: Set the Rejection criteria: DF = 5-1 = 4 At α=. β= 5% significance level. Your response Mos tly dis agree Strongly 4% Mostly disagre e agre e 0% 6% Strongly agree 90% Q.711.07-Dec. The sales of HSD is greater than that of branded diesel. The sales of HSD is less than that of branded diesel. the critical value from the chi square distribution table is .9) Mention Cumulative sales of HSD and branded Diesel for different quarters: Different quarters Cumulative sales of HSD Cumulative sales of branded (in crores) Diesel ( in crores) April07-June-07 71 35 July07-Sept. Ha: α=β. α =95% significance level. Step1: State Hypothesis: Ho: α≠β.07 72 36 Oct.07 80 35 Jan. 50 .

441 χ² = ∑ (O-E)² E =5.300 5. Hence α≠β. Hence null hypothesis is accepted it means that sales of HSD is greater than that of branded diesel. the critical value from the chi-square distribution table is 9.21 0.001 93 80.100 80 80. At β=.07 59 26 Oct.2 0.4 0.01 35 34.07-Dec.08-March08 67 18 April08-June-08 72 20 51 .05 and 4 degree of freedom. Q.4 0.2 0.87 36 34.09 35 34.020 86 80.4 1.4 0.2 0. Step 3: Compute the Test Statistics: χ² = ∑ (O-E)² E Observed Expected (in (O1-E1)²/ Observed Expected (in (O1-E1)²/ E2 (in crores) crores) E1 E1 (in crores) crores) O1 for HSD for HSD O2 for E2for Branded Branded Diesel Diesel 71 80. Hence the supposition made by me is correct that due to rising oil prices people are switching to HSD which is cheaper than that of branded diesel.07 65 24 Jan.020 72 80.21+0.39 34 34.441 =5.884.2 0.4 1.651 4 .651 Interpretation: Calculated value DF Critical value α=95% β=5% 5.844 From this table it can be concluded that calculated value is not same for corresponding values of α and β.2 0.97 31 34.711 9.10) Mention cumulative sales of normal petrol and branded petrol for different quarters: Different quarters Cumulative sales of normal Cumulative sales of branded Petrol (in crores) Petrol (in crores) April07-June-07 57 27 July07-Sept.

39 26 23 0.92 72 64 1 20 23 0.02 24 23 0. Step 3: Compute the Test Statistics: χ² = ∑ (O-E)² E Observed Expected (in (O1-E1)²/ Observed Expected (in (O1-E1)²/ E2 (in crores) crores) E1 E1 (in crores) crores) O1 for HSD for HSD O2 for E2for Branded Branded Diesel Diesel 57 64 0.70 59 64 0.884.44 χ² = ∑ (O-E)² E =2. Step1: State Hypothesis: Ho: α≠β.31 2. the critical value from the chi square distribution table is .04 67 64 0. The sales of normal petrol is less than that of branded petrol.39 2.05 and 4 degree of freedom.44 =4. At β=. Ha: α=β. β= 5% significance level. the critical value from the chi-square distribution table is 9.39 65 64 0.95 and 4 degrees of freedom.31+2.14 18 23 0. Step 2: Set the Rejection criteria: DF = 5-1 = 4 At α=.χ² test application: By applying Chi square test (χ²) we can analyze if the sales of normal petol are greater than that of branded petrol.75 52 . The sales of normal petrol is greater than that of branded petrol.76 27 23 0. α =95% significance level.711.

How will you rate this statement on rating scale. Hence null hypothesis is accepted it means that sales of normal petrol is greater than that of branded petrol. Q.11) “ Higher oil prices are resulting in decline in the sales of retail outlets”.Interpretation: Calculated value DF Critical value α=95% β=5% 4. Rating scale Your response Strongly agree 48 Mostly agree 2 Mostly disagree Strongly disagree Your response Mostly agree 4% Mostly Strongly disagree disagree 0% 0% Strongly agree 96% Interpretation: It can be concluded from this pie-chart that 96% owners of petroleum retail outlets strongly agree that higher oil prices are resulting in decline in sales of retail outlets and 4% mostly agree with this statement. Hence α≠β.75 4 . 53 .711 9. Hence the supposition made by me is correct that due to rising oil prices people are switching to normal petrol which is cheaper than that of branded petrol. It clearly indicates that higher oil prices are badly affecting sales of retail outlets.844 From this table it can be concluded that calculated value is not same for corresponding values of α and β.

CHAPTER-5 54 .

It is being believed that these activities provides an extra edge to the petroleum retail outlets and their sales increases. In this scenario oil companies are battling hard to compensate for losses. Similarly true for oil prices. 55 . restaurants.1 SUMMARY: This research paper is all about studying impact of rising oil prices on the sales of petroleum retail outlets in Delhi NCR region. With metro in operation which is more convenient. For this government is providing subsidies and oil bonds to public sector oil companies. This is resulting in decline in sales of petroleum retail outlets as people are using their vehicle less frequentlty.5. In Delhi NCR region operation of metro also has a pronounced effect on the sales of retail outlets. malls etc. affordable and easily accessible people are shifting to metro. These subsidies are not sufficient to make over the losses suffered by oil companies. Petroleum retail outlets are being accompanied by more non-fuel activities like fun cinemas. In this scenario oil marketing companies are suffering losses all across the world. cheaper. Whatever happens in one economy has an impact on the other economy. Every economy in the world is interconnected with other economies. But impact of rising oil prices has a much wider effect. It is believed that people prefer those places where with fuel retailing they can also enjoy other facilities. Worldwide oil prices are rising causing petroleum products to be dearer. convenience stores. The Indian government is trying hard to compensate for the losses of oil companies. The landscape of petroleum retailing is changing in India.

• Oil prices are rising sharply and this effect is not limited to India only but it is a global phenomenon. These methods are providing a very little relief to oil marketing companies and their losses are still large enough. BPCL and HPCL. So they drive less and hence sales of petroleum retail outlets are being affected.5.of petroleum retail outlets in India and having highest market share. The prices of petroleum products aren’t market driven. • In Delhi NCR region it is not only the reason for declining sales but operation of metro is also a major reason. • The non-fuel activities are playing major roles in the sales proportions of petroleum retail outlets. • Due to rising oil prices sales of retail outlets are declining and oil marketing companies are suffering huge losses. People are traveling at a very low cost and they prefer metro as a more convenient mode of transportation as compared to their own vehicles.2 CONCLUSIONS: From this research following conclusions have been drawn: • In petroleum fuel retailing business the major players are IOC. but still it is the Indian government who drives the prices of petroleum product in India. • Although APM was being dismantled in 2002. • These losses of oil companies are being shared by government and upstream companies like ONGC. • IOC is the biggest player in India as it has largest no. • For this government provides subsidies and issue oil bonds. 56 . • Another interesting thing has been observed that people are preferring non-branded products as compared to branded ones which are costly as compared to non-branded ones.

       ●     In the changed scenario. Customer Relationship Management etc. Site Operations Management. Dealer Management.5. retailers need to develop a sustainable non­fuel               model which should synergize with core fuel business and not detract.                Partner Management. establishing superior network architecture will be the  core area. rural etc. To taste success in this.3 RECOMMENDATIONS: From this research it is clear that growth of Indian fuel retailing business is being greatly affected by oil prices and large no. goals. So to improve the conditions for Indian oil marketing companies government of India has decided to put on hold opening of petroleum retail outlets in India for 2 years. So they should venture in   57 . petro­retailers will have to take a look into the retail skills                they have and accordingly have to make adjustments in that. Network optimization.  So finally on the basis of my study I just want to suggest that Although  Government of    India has hold the opening of  petroleum retail outlets in India for 2 years and ONGC has got   exclusive marketing rights for fuel retailing in India.         ●     Proper understanding of market forces and economics at state/territory level will be                the most important. the               retailers will seek for alternate sources of revenue.                 execution teams). Also.              strategic foresight is one thing but what matters most is the superior execution of                those strategies and this is the factor which shapes core competency for a company                that is hard to replicate by the competitors.                flanking.               Proposition/Brand Management. They aren’t getting any subsidies from Indian government. are some of the skills                that should be incorporated to succeed. This will provide equal playing field for all players. taking examples of foreign               experiences. Building of multiple networks like flagship urban. performance management. flagship highway. like by managing tactical pricing at a trading                  area level. They can venture into this business any   time. • In the changed environment.         ●     The growing competition will increase pressure on margins and therefore.  However. So on the basis of my studies I want to give following recommendations: • The prices of petroleum products should be market driven rather than government driven. companies have to consider each network                like a distinct business line (separate strategy. So oil companies should try to tap that market. of retail outlets. • Indian urban sector has saturated by petroleum retail outlets but India’s rural market is still being untapped. is what needed. It will help in not only smooth functioning of business but also                in driving customers to the outlets.

Appendix 58 . to this business only when the prices are being controlled and determined by industry rather   than government and the mechanism of sharing oil losses with government is being    dismantled.

if any then please mention: …………………………………………………………………………………….5) Mention supplement operations(Please tick at appropriate place) a) Service Boys b) Car wash c) Convenience stores d) Restaurants e) Fast food outlets Q. Information obtained through this survey is for general purpose only and will not be disclosed to any body else.1) Location of outlet:……………………………. OBJECTIVE: ●To determine the impact of rising oil prices on the sales of retail outlets ●To determine the present market scenario of petroleum retail outlets of oil companies. Q.4) Type of facility:……………………………….3) No.. Q.of years in an operation:……………………… Q.. ……………………………………………………………………………………… ……………………………………………………………………………………… Q.6) Mode of operation:……………………………….. a) COCO b) CODO c) DODO Q. a) Self serve b) Full serve c) Both Q.QUESTIONNAIRE:Yor are required to fill this questionnaire with best of your own will.7) Any major changes that you have made either in the type of facilities or type of Supplement operations.8) “Supplement activities leads to increase in customer base. Q.” How you rate this statement on rating scale? Rating scale Your response Strongly agree 59 .2) Current owner of retail outlet:………………….

07 Jan.08-March08 April08-June-08 Q.07 Jan. Sandeep Sharma Management Traniee.07-Dec.How will you rate this statement on rating scale? Rating scale Your response Strongly agree Mostly agree Mostly disagree Strongly disagree With Thanks.10) ) Mention cumulative sales for normal petrol and branded petrol for different quarters: Different quarters Cumulative sales of normal Cumulative sales of branded Petrol (in crores) Petrol (in crores) April07-June-07 July07-Sept.07 Oct. ONGC.9) Mention cumulative sales for HSD and normal diesel for different quarters: Different quarters Cumulative sales of HSD Cumulative sales of branded (in crores) Diesel ( in crores) April07-June-07 July07-Sept.NEW DELHI 60 .07 Oct. Mostly agree Mostly disagree Strongly disagree Q.07-Dec.11) “ Higher oil prices are resulting in decline in the sales of retail outlets”.08-March08 April08-June-08 Q.

. OBJECTIVE: ● To determine the preference of people from their own vehicle to the public transport due to rising oil prices.8) Have you heard about rising oil prices? ( Please tick your response in the table) View Strongly aware Mostly aware Mostly unaware Strongly unaware Not aware 61 ....5) Do you have your own vehicle?... a) Yes b) No Q.. a) Student b) Service Class c) Others Q..........QUESTIONNAIRE: You are required to fill this questionnaire as according to your own will.........6) If yes....3) Profession………………………………………..2) Sex:…………………………………………………… a) Male b) Female Q....4) You are from:…………………………………………..7) Do you operate it on to its full capacity?(Please tick mark on the appropriate place in the table) Capacity Your response 100% 80-100% 60-80% 50-60% Less then 50% Q. a) Delhi b) Other state Q..The information obtained through this survey is for general purpose only. Q.... which type of vehicle do you have? a) Two wheeler b) Four wheeler Q.1) Name:………………………………………………… Q..

what is the reason for this switch over? a) Higher oil prices b) Time factor c) Cheap source of transportation d) Others With Thanks.11) If the switch is temporary.NEW DELHI 62 . Q.12) If the switch is permanent. ONGC.9) If no. Sandeep Sharma. Management Trainee.what is the reason for this switch over? a) Higher oil prices b) Others Q.10) Is this switch over is permanent or temporary? ( Please mark your response in the table) View Your view Strongly permanent Mostly permanent Mostly temporary Strongly temporary Can’t say Q. then what are the other mode of transportation that you opt? a) Metro b) Others Q.

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