In order to offset the negative impact of having to sell fuel at prices below that of government-owned oil-marketing companies, Reliance Industries (RIL) has started operating guest houses at its fuel retail outlets in addition to the restaurants.
"Our fuel business is suffering because the government is not extending the subsidy scheme to private players. So we are trying to attract customers by running guest houses and restaurants," an RIL official said.
The company currently runs restaurants in two formats, one branded A1 Plaza and the other called Refresh. "A1 Plaza offers the typical dhaba fare, while Refresh is a multi-cuisine restaurant," the official said.
Some of the company's guest houses, near fuel retail outlets, offer rooms for as low as Rs 250 per day. "The idea is to attract as many tourists as possible," said an RIL retail outlet owner whose fuel station is located near Hardwar in Uttaranchal.
The Mukesh Ambani-promoted company, which is the country's largest private sector firm, has around 1,400 fuel retail outlets, 90 per cent of which are located on highways. However, some of its dealers had to shut shop due to heavy losses.
RIL sells petrol and diesel at rates higher than government-owned companies such as Indian Oil, Hindustan Petroleum and Bharat Petroleum. However, when there was price parity between RIL and the state-run oil-marketing firms, the former had managed to corner a 14 per cent market share in autofuel retailing, which has now reduced to 1-2 per cent.
It is, however, intriguing to see customers queueing up to get their tanks filled at these outlets. "We get quality and quantity assurance at RIL outlets. Moreover, the attraction of cheap and good food is always there," said Rahul Rekhi, a resident of Dehradun who often travels to Delhi and stops over at RIL's A1 plaza on the way.
"We hope sales at our restaurants and guest houses boost revenues for our fuel business. At the moment, the guest house business is not huge and our retail outlets continue to lose money," the RIL official said.
Similarly, another private-sector fuel retailer, Essar Oil, is being priced out of the market by the government-owned oil-marketing companies. The firm has around 1,300 retail outlets and is in the process of implementing another 200 by March next year. "We are not opening new outlets, but only completing the ones we had started," an Essar official said.
The firm has non-fuel operations in just 10 of its 1,300 retail outlets. "We are not getting enough customers at our fuel outlets, so it doesn't make sense to start a non-fuel business," the Essar official added.