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Ministry tells off RIL for oil retail strategy

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Reliance Industries is pulled up by the petroleum ministry as the company failed to meet its commitment to open 10 per cent of its fuel retail outlets in remote and low-service areas.

Justifying its stand, RIL in its reply to the ministry has said that this was because of the government control on prices of auto fuels, resulting in losses from the overall fuel retailing business.

In 2002, RIL, Shell and Essar were permitted to retail fuel in the country and RIL’s plan was to open 5,000 retail outlets across the country, but the company has so far opened around 1,800 retail outlets, most of these in high-revenue areas like national highways.

“The number of retail outlets that the company has opened in remote and low-service areas is far less than the 10 per cent obligation. Moreover, most of the outlets that they have opened in remote areas are not running,” a government official said.

“We hope that the government may change its policy of selective compensation and treat all players equally,” RIL stated in a letter to the petroleum ministry.

The company also says that the “authorisation of marketing fuels is a consequence of the stated policy (of allowing fuel prices to be determined by the market),” adding that the “unfulfilled promise of market-driven pricing leaves no scope to subsidise operations in low-service and remote areas.”

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