New Delhi: Reliance Industries Ltd (RIL) will close about 900 petrol stations as subsidized sales by dominant state firms make private outlets unviable, but Shell India Marketing Pvt. Ltd and Essar Oil Ltd plan to continue operations.
An RIL official, who did not want to be named, said the company was shutting down 900 pumps it directly owns as it did not get any subsidy.
“We have stopped supplying products to the company-owned outlets. In a week’s time or perhaps less than that the outlets will stop selling fuel,” the official said, adding that another 500 petrol stations run by dealers may continue operations.
‘The Economic Times’ had first reported this move on Tuesday.
RIL, which runs India’s biggest refinery, set up a series of fuel outlets after the government ended a state monopoly over petrol stations less than a decade ago. RIL grabbed over 15% of the market two years ago, but sales fell after the government, striving to contain inflation, did not allow state firms to raise retail prices in line with soaring crude oil prices.
Private firms sell fuel at market prices but state firms such as Indian Oil Corp., Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd can retail fuels at lower prices as the government compensates them with bonds and cheaper crude oil.
“The move is due to lack of level playing field,” the RIL official said. A spokesman for RIL declined comment.
State firms control about 33,000 petrol stations, while private rivals run about 2,500.
Another private oil firm Essar Oil, which has a network of 1,000 petrol pumps, has no plans to shut down operations, a company spokesperson said.
A spokesman for Shell India said: “We want a level playing field ... There should be no compensation, let the market decide. And if there is a compensation, it has to be consistent to all players”.
India economic growth pegged at 7.5%
New Delhi: India will see economic growth slow to an average of 7.5% over fiscal years 2008 and 2009, though as the second fastest growing economy in Asia, it should continue to inspire investor confidence, the Economist Intelligence Unit (EIU) has projected.
Growth will be tempered by slowing exports and consumption, in the event of a prolonged downturn in the global economy, with associated risks of high inflation and weak infrastructure leading to supply bottlenecks, Anjalika Bardalai, senior economist and Asia editor, EIU, said on the eve of ‘The Economist’ magazine’s 13th annual business roundtable with the government, to be addressed by finance minister P. Chidambaram.
As part of its business environment rankings of 82 countries, EIU also ranked India at a high 7.3 (out of 10) in market opportunities, or fourth in Asia, and at 6.9 in terms of its policy towards foreign investment (eighth in Asia). Paromita Shastri
Margadarsi files affidavit in SC
New Delhi: Margadarsi Financiers on Tuesday filed an affidavit before the Supreme Court stating that it has repaid some of its depositors.
The company said in the affidavit that, as on 30 January, it has paid Rs1,138.18 crore owed to 118,000 depositors. The company owes Rs2,014.58 crore to 274,000 depositors.
The apex court had in an earlier hearing in April 2007 ordered that there should be no freezing of Margadarsi Financier’s accounts or attachment of its properties.
In November last year, the Andhra Pradesh government had filed an application seeking vacation of the court’s order made in April and asked the court to direct Margadarsi to periodically furnish more details related to its bank accounts and records.
A division bench then asked Margadarsi to respond to the state government’s application.
In December, the state government filed a criminal petition seeking the court’s permission to appeal against a order passed by the Andhra Pradesh high court that had set aside a search warrant issued against Ramoji Rao, the owner of Margadarsi Financiers and publisher of Telugu newspaper ‘Eenadu’.
The Supreme Court has fixed 27 March for hearing the proceedings between Margadarsi Financiers and Andhra Pradesh government. Malathi Nayak