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HPCL in retail thrust ahead of decontrol

State-run Hindustan Petroleum Corp Ltd, India's second-largest downstream refiner, on Tuesday launched a clutch of value-added services to boost its brand and strengthen customer loyalty when the $15 billion sector is freed of government control in April.

Initially, 85 of its petrol stations spread across Mumbai, Delhi, Bangalore and Calcutta will take the new Club HP brand and offer services like automated teller machines, communication facilities, bill payment services, vehicle finance and over-the-counter drugs.

These facilities are likely to be expanded to about 1,000 of the more than 4,600 outlets selling its products by March 2003.

"The customer is the most important person today. Unless you have devised a strategy to retain your customer and get new customers by offering value added services, you won't be able to sustain in this market," K Muralidharan, general manager at HPCL, told Reuters on the sidelines of a news conference.

He did not specify the amount earmarked for the exercise but said it was "substantial".

The company's retail thrust comes just before the government's April 1 deadline for dismantling its administered pricing mechanism, which will end two decades of state control on retailing and selective pricing of petroleum products.

Liberalisation of the state-dominated sector, where only four state-run oil companies are now allowed to retail fuel, is expected to lower prices and introduce competition between domestic and foreign firms eager to own a chunk of the oil retailing pie in a nation of more than one billion people.

Any company that has invested or plans to invest Rs 20 billion over the next 10 years in India's oil and gas infrastructure will be allowed to retail petrol, diesel and aviation fuel from April 1 onwards.

The 50-year-old HPCL, which owns nearly 60 per cent of outlets now using the HPCL brand, said it had formulated the Club HP concept after obtaining feedback from more than 13,000 customers in nine major markets.

HPCL's shares have more than doubled so far in 2002, boosted by positive sentiment on the sector after the government's successful stake sale in oil marketing firm IBP Co Ltd and on the impending deregulation of the sector.

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