[TusharK]

Public sector oil companies are set to double their retail network by allotting 65,000 new petrol pumps in the country as demand for petrol and diesel grows.



Hindustan Petroleum Corporation Limited (HPCL) is planning to set up 12,685 more outlets, while Bharat Petroleum Corporation Limited (BPCL) wants to add 15,802 outlets. Indian Oil Corporation (IOC) plans to set up 26,982 new fuel bunks. Reports suggest that the new fuel stations will have automated systems.

Currently, there are 63,674 fuel stations in India. Out of these HPCL operates 15,287, BPCL has 14,593 and IOC has 27,377 fuel pumps. ONGC / MRPL has 6 filling stations, while private refiners like Nayara Energy, Reliance Industries and Royal Dutch Shell have 4,895, 1,400 and 116 fuel stations respectively.

Source: Firstpost

Link to Team-BHP News

[sri_tesla]

Govt's stupidity has no bounds. When the world is shifting to EVs, govt wants to double the petrol pump count. It may be understandable if they want to increase by 10-15% but doubling the count? I bet there will be protests by petrol pump dealers in few years down the line because less demand. They are already doing protests every years to increase the margins.

Its similar stupid policies in other industries as well. When the entire coal power industry is struggling because of low utilization, govt/NTPC is still setting up new coal plants. Why don't they just buy the power plants that are struggling to run?

[SmartCat]

Originally Posted by sri_tesla

Govt's stupidity has no bounds. When the world is shifting to EVs, govt wants to double the petrol pump count. It may be understandable if they want to increase by 10-15% but doubling the count? I bet there will be protests by petrol pump dealers in few years down the line because less demand. They are already doing protests every years to increase the margins.

I don't think these petrol pumps will be in Mumbai, Bangalore etc. The website petrolpumpdealerchayan.in says dealer location will be based on non-availability of petrol pumps in vicinity and projected volumes.



Outside of metros, tier I/II/III cities & towns, I guess lots of citizens need to travel XX kms to get to the nearest fuel pump.

Its similar stupid policies in other industries as well. When the entire coal power industry is struggling because of low utilization, govt/NTPC is still setting up new coal plants. Why don't they just buy the power plants that are struggling to run?

You need to know the background story first. 10 years ago, everybody rushed in to setup power plants by bidding low. The tariff quoted was based on coal mines allocated to them or based on imported coal. But because of certain circumstances (Indonesia hiked export tariff on coal, courts struck down coal mines allocated), the power plants are not operational. They can source coal at higher prices, but then State Electricity Boards refuse to pay higher price for electricity.

Now, even if NTPC takes over these plants, SEBs won't pay higher tariff. It would be unfair to other bidders too (who lost out because original promoters bid so low). Most of these plants are stuck in NCLT and it will take some time for creditors to come to a decision.

[Carpainter]

In other words why would someone invest a huge chunk of money (including land) in a business that doesn't have huge future potential. On one hand existing dealers will get aggravated due to increased competition and on the other hand new players will not have too much time to get back their return on investment. Even the govt. wants to give subsidy on EVs and wants to convert gasoline cars to EV by 2030 (impossible to meet). It's nothing but a political gimmick before the upcoming election and a way to make quick money when they know it's hard to find places to open this many number of fuel stations.

[srishiva]

If you look at even Bengaluru, the City grows in a year in all directions. You would need new petrol stations. I live in RR Nagar and we have had 4 pumps coming in a radius of 1 km in couple of years.
You will earn lot of money by the time EVs become mainstream (100%? are we kidding?) I guess some of them can convert them to LPG centers later

[avishar]

So

Originally Posted by sri_tesla

Govt's stupidity has no bounds. When the world is shifting to EVs, govt wants to double the petrol pump count. It may be understandable if they want to increase by 10-15% but doubling the count? I bet there will be protests by petrol pump dealers in few years down the line because less demand. They are already doing protests every years to increase the margins.

I absolutely agree with you. If not EV production, the GOI MUST use some of the PSU largesse and set-up an Indian Battery Commitee or something which will rope in private players like Tata, Indian auto components, Indian research institutes to make sure India has the capability of manufacturing lithium-ion battery cells at A LOW COST and adequate efficiency. And also solid-state batteries.

This is critical to ensure that when we need to switch over to EVs, we don't have to go with a begging bowl to China to import batteries.

The Chinese and the Koreans, along with Tesla-Panasonic are all reaching $100/kWh and fairly efficient motors. The installed capacity in the world today and amount in gWH under-construction is already at a level where it is going to support 5-6 million cars in less than a couple of years time.

China has already tied up all the resources from downstream to upstream. They have bought mines all over the world, including Cobalt ones, and has invested in biggest lithium miners/mines in the world. The cost of production is low enough to attract even the Germans, who are, for now going to depend on Chinese supplier like CATL for batteries. CATL is also opening a plant in Germany to supply to Volkswagen, BMW and Daimler, because the Germans were late too.

Already the Chinese are coming via SAIC-MG, and this time it seems like a serious effort. They are right now world leaders in cheap, cost effective EVs. Before we know it, they might be here with those too.

We have missed the Auto bus once, we should not miss it this time.

Scepticism about EVs are understandable. However, I look at the Indian consumer in a different way. We are very, very fast to adopt new technology and make it ordinary. Look at how many times we have 'leaped' over established tech like land-lines or cable TV, or even radio call taxis. In some places, I have seen entire populations of 'rickshaws' supplant by electric-trikes in just a year. If there is an advantage of using an technology, if it is cheaper and convinient, we will adopt it and fast. Much faster than the west.

Also, the vast majority of this country has no compelling reason to hold onto ICEs because of any romantic notion of a love of cars. Because there is only been a generation of us who has living through post-liberalisation India and hundreds of millions still who has never bought a car. Very easy to switch.

What is required is the charging infrastructure, but it is not a deal-breaker. That does require much technology.

This will not happen today, or tomorrow. But surely in the next 5 years, we shall start seeing cheap EVs from Maruti or Tata or Hyundai or maybe BYD.

[sri_tesla]

Originally Posted by smartcat

You need to know the background story first. 10 years ago, everybody rushed in to setup power plants by bidding low. The tariff quoted was based on coal mines allocated to them or based on imported coal. But because of certain circumstances (Indonesia hiked export tariff on coal, courts struck down coal mines allocated), the power plants are not operational. They can source coal at higher prices, but then State Electricity Boards refuse to pay higher price for electricity.

Now, even if NTPC takes over these plants, SEBs won't pay higher tariff. It would be unfair to other bidders too (who lost out because original promoters bid so low). Most of these plants are stuck in NCLT and it will take some time for creditors to come to a decision.

The issue is much deeper than that. Below table shows the PLF for coal power plants.


PLF is going down for the last decade for coal plants irrespective of the owner. Due to massive capacity addition in quick succession and large and cheaper renewable energy addition coal plant PLF is going down rapidly. Situation only gets worse because of solar and wind are currently ~20% cheaper than the cheapest coal power being produced by NTPC. Due to freight and mining costs increase, coal is getting costlier each year while solar and wind will be same for the next 25 years. It takes 4-5 years to build a new coal plant and by that time renewables will be probably 50% cheaper than coal. Also, battery storage will be mainstream by that time, which makes renewable energy even more desirable.

Why is NTPC is building new coal plants despite protests by state govts and local people in such situations? Pollution problem does not seem to be an issue for govt at all.

[tarik.arora]

I probably have a different view on this. EVs though touted to be the next big thing, are still a good 10-15 years away. Also, we need land/infra for charging stations as well and what better place than a fuel pump. We have seen this in the west where fuel pumps are being used for setting EV charging stations. In my opinion, the OMCs and the government are trying to solve 2 problems in one shot. Have enough pumps to feed the demand and when the time arises, convert these fully established and ready pumps into charging stations. This way the pump owners earn by selling fuel for the next few years and then gradually shift to charging infra as and when required. This is surely a well thought of move and there is much more to this than what meets the eye.

[fordday]

Originally Posted by tarik.arora

I probably have a different view on this. EVs though touted to be the next big thing, are still a good 10-15 years away.

This way the pump owners earn by selling fuel for the next few years and then gradually shift to charging infra as and when required.

I think we are not far away to adopting EVs. It will come upon us sooner than we are able to imagine.

If this news report link is to be believed, the PSU fuel bunks may actually get priority is converting them to public charging stations.

[SS-Traveller]

Excellent news...

...for producers and dealers of naphtha, kerosene and a multitude of other adulterants that go into shoring up the profit margins of fuel retailers.

When was the last time anyone stood in a long queue to fill up their tanks at a petrol station? If the demand is not going to rise drastically because the government plans to promote EVs, the sales of each of the pumps is going to drop. And when that happens, the pump owners will try their utmost, by legal / illegal means, to maximise their return on investment.

BS-VI fuel quality be damned.

[stanjohn123]

It's foolish to be investing in fuel stations like these considering that your land will be locked up with that particular oil company for 20 year's. Plus margins are already very low and with all the new penalties and surcharges on buying new fossil fuel vehicles, the sales is only going to dwindle in near future.

To be honest people and our government are both confused in which direction to steer. Every day they keep making such contradicting statements. Either go EV or focus on fossil fuels.

If EV means, they have to start investing in battery production and infrastructure for it. This will be a good investment but with 70% of our population in rural I don't know how they are going to develop this market.

The problem is we don't have visionary leaders who can decide for long term based on our present condition,so we can only expect these kind of decisions.

[ACM]

ODD

What about the move to Electric Vehicles?

This could all turn into dead investment in future. Existing pumps itself may need a business rejig.

Long term thought is not put into this plan.

Smell a plan to collect bribes while allocating and make some money before Oil runs out.

Ya ya we know that petrol and diesel will continue to be needed. But increase in demand?

[deehunk]

Originally Posted by sri_tesla

Govt's stupidity has no bounds.

Its similar stupid policies in other industries as well. When the entire coal power industry is struggling because of low utilization, govt/NTPC is still setting up new coal plants. Why don't they just buy the power plants that are struggling to run?

This is nothing but a pre-poll gimmick before the 2019 LS elections. We know who will be the beneficiaries of this policy.