IOC wants 50:50 JV for RIL’s fuel outlets

IOC wants 50:50 JV for RIL’s fuel outlets
PTI
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First Published: Fri, Mar 20 2009. 11 22 PM IST

Equal stake: A closed Reliance petrol pump in Rajasthan. Private firms are considering reopening outlets after crude’s 66% decline. Harikrishna Katragadda / Mint
Equal stake: A closed Reliance petrol pump in Rajasthan. Private firms are considering reopening outlets after crude’s 66% decline. Harikrishna Katragadda / Mint
Updated: Fri, Mar 20 2009. 11 22 PM IST
New Delhi: State-run Indian Oil Corp. Ltd (IOC) has sought a 50:50 partnership with Reliance Industries Ltd for operating the latter’s closed petrol pumps.
Royal Dutch Shell Plc. has also shown interest in reviving the fuel retail stations, people familiar with the situation said on condition of anonymity.
Equal stake: A closed Reliance petrol pump in Rajasthan. Private firms are considering reopening outlets after crude’s 66% decline. Harikrishna Katragadda / Mint
Reliance had sought expressions of interest from Indian Oil, Shell, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd by Friday for a possible partnership for reopening the petrol pumps.
The company will set up a data room and interested parties will now conduct due diligence before making a firm financial proposal, based on which the Mukesh Ambani-controlled firm will choose a partner.
The people close to the matter said Reliance wants interested companies to select between 26%, 50% and 74% equity stake they would like to buy in the proposed joint venture company.
A Reliance spokesperson was not available for comments.
Reliance shut its 1,432 fuel stations across the nation last year as rising crude prices made fuel sales unviable.
The company couldn’t compete with state-run rivals, which get subsidy to sell fuels below cost in a bid to curb inflation.
Private companies, including Reliance and Essar Oil Ltd, don’t sell fuels below cost because the government doesn’t compensate them . They may be considering reopening outlets after crude’s 66% decline from a record in July.
(‘Bloomberg’ contributed to this story.)
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First Published: Fri, Mar 20 2009. 11 22 PM IST