Spoilt for choice, the Indian consumer now has the leeway to demand value for the money and time he spends. This has forced petroleum companies to introduce innovative strategies to attract consumers. Petrol stations, today, offer not just fuel but non-fuel services like convenience stores, ATMs, fast food outlets, medical shops, etc., as well. Petroleum retailers are aiming to build strong brands around customer experience, value added fuels and
non-fuel products and services.
Petro-retailing in India has been evolving for the past few years now. The factors responsible for the changes being witnessed are transformation in refining capacity, deregulation of marketing of petroleum products, dismantling of Administered Price Mechanism (APM), possible replacement of the Oil Coordination Committee (OCC) with a downstream oil and gas regulatory body, disinvestment of the government's equity in petroleum refining and marketing companies, and the entry of new domestic and multinational players into the sector. The entry of private sector players like Reliance, Essar, ONGC, Numaligarh Refinery, etc., has led to a fiercely competitive petro-retail market. As customers are becoming more informed, their needs and expectations are changing. There is a need to revolutionize the rules of the game. Emerging competitive forces are pushing retailers to review their ways of doing business; there is a fight for the market share on the one hand and squeezing of margins and profitability on the other. Hence, in order to improve profitability, petro retailers need to enhance revenues by exploring alternate revenue lines, better customer price management, increase throughput, attract new consumers or increase revenue from existing customers and create strong brand equity.
As a result of the above changes, petro companies are focusing on setting up state-of-the-art facilities for offering fuel and non-fuel services. Efficient dispensing machines, branded fuels, quick oil change centers, loyalty programs and use of technology have been introduced with non-fuel businesses like convenience stores, ATMs, fast food outlets, medical shops, grocery, dhabas, etc., at petrol stations. By building strategic tie-ups with other players like fast food joints, commercial banks and courier companies, petro-retailers are enhancing their non-fuel revenues. It is expected that a petro-retailer's revenue from non-fuel sources may increase by 20%. |
