Reliance-BP petrol pumps to dent market share of PSU retailers: Morgan Stanley

Reliance Industries Ltd and UK’s BP plc formalising plans to set up petrol pumps under Jio-BP brand will impact market share of state-owned fuel retailers, Morgan Stanley said in a research report.
Reliance-BP petrol pumps to dent market share of PSU retailers: Morgan Stanley

New Delhi

Reliance and BP last week announced further details of their retail fuel partnership, in which the British firm has taken 49 pc stake for $1 bn. The tie-up will see RIL’s 1,400 existing pump stations being ramped up to 5,500 over five years. It also will increase the lucrative aviation fuel stations from 30 to 45.

“Targeted fuel station additions would be nearly equivalent to two-thirds of annual station additions by (state-owned) oil marketing companies (OMCs),” it said.

“This should also help RIL sell more refined products domestically as refinery export restrictions ease.” Retail network will be under the Jio-BP brand and will cater to mobility solutions that may leverage BP’s electric charging technologies and RIL’s digital ecosystem.

“We have seen limited plans by OMCs on this front, however current regulations on the setup of electric charging infrastructure favour OMCs considering their reach.” RIL and BP expect to form their partnership by first half of 2020 and it will include convenience stores and Castrol lubricants. Morgan Stanley said the overall increased competition in domestic fuel markets would re-rate multiples as fuel pricing gets delinked from government intervention.

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