The country's leading oil marketing company, Indian Oil Corporation (IOC) is remodelling its business by increasing focus on petrochemicals to hedge certain unpredictability in the fuel business. Apart from conventional fuels, the company will offer EV charging points at its pumps and battery swapping points at the fuel stations that are in line with IOC's aim to make itself future-ready. In a recent interview with PTI, IOC Chairman Shrikant Madhav Vaidya stated that the company aims to become a leading energy company in India without restricting itself to retail only petroleum products.
IOC has already installed EV charging points at 76 fuel stations, and battery swapping facilities at 11 outlets. Additionally, IOC is also closely evaluating several advanced battery technologies which will help in setting-up of the metal-air battery-manufacturing facility for EVs.
Indian Oil recently introduced differentiated LPG for industrial users which gives flame temperature that is 80 per cent higher than conventional cooking gas. Thus, cutting down cooking time and helps in saving around 5 to 8 per cent on fuel. Apart from this, the company also introduced hydrogen-spiked CNG that will give BS-VI emissions from BS-IV vehicles. Notably, IOC owns 40 per cent of India's diesel-dominated petroleum product market.
Shrikant Madhav Vaidya said, "Eventually we intend to become energy company of India and not just be restricted to selling petroleum products. The world is changing. We intend to set up EV charging points and battery swapping stations at our petrol pumps alongside offering auto-LPG and conventional fuels. So it will be a bouquet of offering."
Moreover, the company has fully automated all the 29,800 petrol pumps across the country. It has also worked on the look and feel to match with private sector rivalry. It has received an encouraging response for its recently introduced differentiated LPG. Vaidya said that IOC's strong R&D is bringing the differentiated fuels to the market.
Though the public sector firms rule the Indian fuel market, the arrival of new entrants like Nayara Energy has made the market a bit competitive now. Also, Reliance Industries has renewed its interest in fuel retailing through a joint venture with UK super-major BP Plc. On the other hand, Adani Group also aims to enter the segment with a collaboration with TOTAL.
IOC has also established itself as the second-largest player in natural gas in India with a licence to retail CNG and piped cooking gas in 40 geographical areas. "We are also aggressively promoting the use of compressed bio-gas, 2G ethanol, and biodiesel produced from used cooking oil, besides integrating our refinery processes with bio-fuels production," he said.
The fuel business is very much prone to volatilities which further reduces the margin of the company. Thus, IOC plans to add petrochemical plants at all nice of its oil refineries to de-risk the business. The percentage of crude oil converted into chemicals is low which is currently at 5-6 per cent. And, IOC intends to take it up to 10-12 per cent.
He further said, "This would de-risk the fuel business. We realise that the volatility of the market can be easily controlled by having a good footprint in the petrochemical sector. Petroleum fuels continue to be my main business as far as turnover is concerned, but profitability I intend to get from petrochemicals."