Chennai Petroleum’s ₹400 Crore Bet: Driving Into India’s Fuel Retail Scene

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Chennai Petroleum Corporation Ltd (CPCL), a subsidiary of IndianOil, has announced a major strategic move to establish its own network of retail fuel outlets across India. The company will invest ₹400 crore (4 billion rupees) over the next 2-3 years as part of this expansion, coinciding with its Diamond Jubilee celebrations.

Key Highlights:

CPCL is entering the retail fuel market after a gap of nearly two decades, having previously operated a single outlet in Sriperumbudur in 2002.
The investment of ₹400 crore is earmarked as capital expenditure to set up outlets selling petrol and diesel, with the first phase of roll-out targeted during the Diamond Jubilee year.
The company has received approval from the Ministry of Petroleum and Natural Gas to proceed with this venture.
Initially, the number of outlets to be opened has not been disclosed, as CPCL plans to gauge market response before scaling up operations.

Expansion will be gradual, starting in Tamil Nadu and potentially extending to other states based on market conditions and demand.

CPCL’s Managing Director, H Shankar, emphasized a careful and strategic approach to site selection, ensuring new outlets are established only where there is significant market potential and limited competition.

The move marks CPCL’s return to retailing, which was previously handled by its parent company, IndianOil, after CPCL became a standalone refinery.

The company views this initiative as a “startup” phase, with further expansion contingent on positive market feedback.

The retail foray is not expected to cannibalize IndianOil’s revenues, as management believes there is ample room for new players in India’s growing fuel market.

Source: The Economic Times